Shares in medical cannabis company Cann Group Limited (ASX: CAN) has surged 44.3% after the company announced they have secured a $50 million loan.
The Cann Group is a global cannabis company, and are nearly two years into building a state-of-the-art medical cannabis facility in Mildura. The facility was given a $1.975 million grant from the Victorian Government earlier this year, as part of the Regional Jobs Fund.
In an ASX release, The Cann Group estimated they will spend around $165 million on the facility, infrastructure and site works. Now, the company is adding another $50 million to their building budget, securing a loan with NAB that will fund the majority of their $59 million in projected costs.
News of the loan drove the Cann Group’s share price up dramatically, surging 44.3% since Monday. The company has also been granted licenses to cultivate, manufacture and research cannabis in the Mildura facility.
This new loan will allow building on the Mildura production facility to recommence in February after it was stalled by COVID-19. The Cann Group expects the first stage of the facility to be completed in March 2022, with the plant producing around 12,500 kilograms of cannabis annually while building continues.
Once the Mildura facility is fully operational the company expects it will generate over 70,000 kilograms of cannabis flower and $191 million in annual revenue. The facility is also expected to generate 130 local jobs.
CEO of the Cann Group Peter Crock has celebrated the loan as a sign of the new facility’s impending success, writing in their ASX release:
Securing the support of a tier one bank is a strong validation of our strategic growth plans.
The Cann Group was previously in news in mid-October after their biggest shareholder Aurora Cannabis sold their 11.84% stake in the company for an estimated $13.4 million.
As of November 25, shares in the Cann Group are up 10.89% at $0.56.