National Australia Bank-backed cannabis merchant Cann Group revealed it is running out of cash on Friday as a debt owed to the bank grew $5.3 million to $60.96 million, while its investment in a $115 million Victorian cannabis warehouse facility pressures its solvency.
NAB did not respond to a request for comment on the status of the debt facility Cann Group first obtained in December 2020 to finance the warehouse’s construction in Mildura, Victoria.
The cannabis merchant’s cash-flow statement shows it posted an operating cash loss of $5.3 million on sales up 23 per cent to $5.1 million for the quarter to June 30, with available cash on hand of $764,000.
The company declined to comment on its cash flow pressure or the debt made up by a drawn $50 million bank facility and $15 million working capital facility.
The Mildura facility has also received financial support from the Victorian government’s regional jobs fund, but shareholder support has evaporated with the stock cratering 90 per cent since 2020.
Its horror run included a $3.6 million cybersecurity loss after it said it was duped into making payments for works at the Mildura facility to an unknown third party to become the victim of asophisticated cyber fraud against the company and its overseas contractor.
On Friday, the cannabis retailer added it raised $4.46 million from retail shareholders as part of a July capital raising, although it initially targeted $11.7 million.
It has also flagged plans to raise cash by lodging a claim for a government tax refund in financial 2023, alongside a potential deal to sell part of its cultivation facilities and certain business assets for $5.48 million to medicinal cannabis rival Sativate Ltd.
Some of the cash raised will be used to support plans to produce 12.5 tonnes of cannabis on an annualised base, the company said.
It looks like the share price has tanked further on the back of this report
