Cann Group has completed a A$2 million capital raise with investment firm Obsidian Global Partners, with a further $13m potentially available subject to additional agreements being reached.
The new funding will support working capital as Cann Group works toward an annual cannabis production target of 12.5 tonnes at its Mildura facility by FY25.
Through a convertible securities facility, Cann will receive an initial $2m from Obsidian, with the total potentially reaching $15m if further terms are agreed upon. Each drawdown will be capped at $3m.
Under the arrangement, Obsidian will receive securities that can be converted into fully paid ordinary shares.
The announcement comes roughly three weeks after Cann Group reported its revenue had doubled in the first quarter of the financial year, though the company also faced renewed scrutiny from the ASX over its financial position.
At the end of September, Cann Group had just $687,000 in cash and less than $4m remaining on its debt facility with National Australia Bank (NAB), leaving it with sufficient financing for under three months of operations.
In addition to expected 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".
Cann Group has been contacted for comment.
