Little Green Pharma (LGP) has removed a loan to Canopy Growth from its balance sheet after raising A$5 million via a placement from new and existing shareholders.
The funds will repay the balance of a loan note relating to LGP’s acquisition of a Danish medicinal cannabis facility from Canopy in 2021.
LGP said in its quarterly financial statement in January that it owed C$3.1m ($3.4m) plus interest to Canopy.
The balance of the funds raised in the placement will be used as working capital.
The raise saw 27 million shares issued at $0.18c per share, a 5.3% discount on the closing price on March 21.
LGP chief executive Fleta Solomon, who has committed $50,000 to the placement subject to shareholder approval, said the removal of the loan strengthens its balance sheet and “removes associated interest expenses”.
“In addition, the business will use the balance of the funding to continue delivering on its growth trajectory and focus on achieving cashflow break-even,” she said.
“We are confident the current business momentum will allow it to continue growing sales and leveraging domestic and international medicinal cannabis market opportunities.”
