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Listed cannabis company AusCann (ASX: AC8) has emerged from a trading halt this morning to reveal a $33.4 million capital raising which is set to fund the company's new phase of research and development (R&D).
The share placement was made to North American and Australian investors including existing shareholder Canopy Growth Corporation which, following completion of the placement, will increase its ownership of AusCann to 11.2 per cent.
The placement represents 30.4 million new fully paid ordinary shares in AusCann under an issue price of $1.10, an 11.7 per cent discount on the weighted average price of its shares over the 15-day prior period of trade.
AusCann has earmarked the funds for several key developments including clinical studies, expansion of manufacturing facilities, establishment of a new facility in Chile and crucial R&D into cannabinoid pharmaceuticals.
READ MORE ABOUT AUSCANN ON THE CANNABIS INDEX
The company will also seek to establish medical outreach programs in new international markets.
Managing director Elaine Darby is delighted at the response from shareholders who have seized the opportunity to boost AusCann.
"We are very pleased to offer both new and existing shareholders the opportunity to participate in the evolution of AusCann," says Darby.
"The capital we secure from this raising will enable us to accelerate our corporate objectives and provide Australian and global markets with the efficacious, clinically validated and cost-effective medicinal cannabis products."
After its $33.4 million placement is settled, AusCann will offer a share purchase plan to existing shareholders with the aim of raising a further $8 million.
At the time of writing (11:29am AEST), AC8 shares are trading at $1.19.
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