Cann Group has raised A$2 million under a deal with investment firm Obsidian Global Partners, with another $13m on the table subject to further agreements.
The funds will provide working capital as Cann Group strives to achieve annual cannabis production of 12.5 tonnes at its Mildura plant by FY25.
Under a convertible securities facility, Cann will initially receive $2m from Obsidian, rising to a total of $15m should agreement be reached. Drawdowns will be limited to $3m at a time.
Obsidian will be issued with securities convertible into fully paid ordinary shares.
News of the capital raise comes three weeks after Cann Group reported a doubling of revenue in the first three months of the financial year. But it also faced further questions from the ASX concerning its finances.
With only $687,000 cash at bank, and less than $4m remaining on its debt facility with National Australia Bank (NAB), Cann Group held enough financing for less than three months’ trading at the end of September.
Along with cash from Sativite following the sale of its southern facility, and a $2m government research and development grant, Cann Group told the ASX it was in “advanced negotiations… with a number of parties” regarding “non-dilutive capital opportunities”.
Cannabiz has contacted Cann Group for comment.