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Cann Group (ASX: CAN) CEO Peter Koetsier has tendered his resignation just 14 months after assuming leadership of the medicinal cannabis company, which is growing sales at a fast clip but remains burdened by the debts incurred as a result of its capital-intensive crop production and manufacturing endeavour in Mildura.
Koetsier joined Cann Group in January 2023 following the departure of Peter Crock, who had led the group through its initial public offering (IPO) in 2017 and spearheaded the company's flagship $115 million Mildura facility which had its first commercial crop in 2022.
The outgoing CEO, who in November was appointed chair of Medicinal Cannabis Industry Australia (MCIA), has cited family reasons for his exit.
"I want to express my deepest gratitude to the board, employees, and stakeholders of Cann for their support and collaboration during my time as CEO. I am truly grateful for the opportunity to have worked alongside such talented and dedicated individuals," Koetsier says.
Non-executive director Jenni Pilcher will take on an executive director role at Cann Group while the board sets a new strategic direction, and Koetsier will work through a handover period with the expectation of finishing up at the end of the financial year.
Since taking the helm, Koetsier has overseen rising yields at the Mildura facility as it looks set to produce 12.5 tonnes this calendar year. In FY23 revenue was up 115 per cent at $13.78 million, while in the December half that followed sales rose 46 per cent year-on-year to $1.64 million.
"We are grateful for Peter’s efforts over the past 14 months in scaling up of our business which has led to the production of over 12 tonnes of product per annum, and increased sales," says Cann Group chairman Dr Julian Chick.
"I wish Peter well in his next endeavour," Chick says.
At the start of this week Cann Group announced a funding update after executing a sale and purchase agreement for $1.7 million with Biortica Agrimed for a range of equipment surplus to its needs, or $1.9 million if payment is made through a combination of equity and cash if both parties agree.
Biortica is set to pay two deposits totalling $200,000 by 19 April, with the final balance of $1.5 million at settlement on or before 30 June.
On that same day Cann announced it had extended its $15.6 million debt facility agreement with National Australia Bank (ASX: NAB) from 30 November 2024 to 31 March 2025, whilst deferring the quarterly repayment of the principal loan amounts of $49.4 million from the NAB Construction Facility for 12 months from May 2024 to May 2025.
Whilst continuing to explore further funding options, the liquidity implications of these announcements will have given the board some respite after going concern matters were raised in the company's half-yearly results recently. At the close of 2023 Cann had just $1.64 million cash in hand, total debts of $64.1 million, and $2.8 million left in terms of unutilised debt.
Cann also received a $2 million loan lifeline in November from Obsidian Global LLC.
"Expenditure in the company is undergoing a critical review by management to ensure it is at appropriate levels for the next stage," the company said earlier this month.
"On the basis that the company is successful in its pursuit of additional financing, the directors are of the opinion the company is a going concern."
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