Medicinal cannabis cultivator and manufacturer Little Green Pharma (ASX: LGP) will use the proceeds of a planned $22 million raise to accelerate its global expansion plans and increase its manufacturing capacity.
As announced today, LGP has received firm commitments to raise approximately $22 million by way of a placement of shares.
The company, which operates an indoor cultivation facility in Western Australia, hopes to raise a further $5 million by way of a share purchase plan (SPP).
Proceeds of both the placement and the and the SPP will enable the company to accelerate sales and marketing efforts in Australia and offshore, expand its cultivation and manufacturing capacity, and provide general working capital.
At $0.65 per new share under the placement, representing a discount of 30.5 per cent to the last traded price on 4 February when the company went into a trading halt, 34 million new shares will be issued.
"We're highly encouraged by the strong support shown by new and existing shareholders for Little Green Pharma," says LGP managing director Fleta Solomon.
"I'd like to thank our existing shareholders for their continued support and would like to welcome new investors to the Little Green Pharma family.
"Little Green Pharma has gone from strength to strength, and has achieved immense growth in the last year, most recently setting new records for quarterly revenue, unit sales, and patient numbers."
LGP's raise comes hot on the heels of the news that the company was named the primary manufacturer for a trial of cannabis oil in France.
If the trial is successful, LGP will have the first mover advantage in an anticipated French market potentially worth 4 billion (AUD$6.3 billion).
The trial, to be conducted in partnership with French pharmaceutical distributor Intsel Chimos, will be the only pathway for the supply of cannabis medicines into France for the next two years.
Shares in LGP are down 14.97 per cent to $0.80 per share at 3.13pm AEDT.
Business News Australia
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