Little Green Pharma (LGP) has cleared a debt owed to Canopy Growth from its books after completing an A$5 million share placement with new and existing investors.
The capital will settle the outstanding loan note connected to LGP's purchase of a Danish medicinal cannabis facility from Canopy in 2021.
The company's January quarterly financial report disclosed that it owed Canopy C$3.1m ($3.4m) plus accrued interest.
Any remaining proceeds from the placement will go toward working capital.
The placement involved 27 million shares priced at $0.18c each, a 5.3% discount to the closing share price on March 21.
LGP chief executive Fleta Solomon, who has committed $50,000 to the placement pending shareholder approval, said clearing the loan strengthens the company's 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."
