Cann Group Surges with Record Production and Strategic Funding Boost
Cann Group Limited delivered record production and revenue growth in Q4 FY2025, securing new funding and advancing a major debt restructuring to set the stage for profitability in FY2026.
- Record quarterly dried flower production of 2.05 tonnes, up 41%
- Full-year FY2025 production reached 5.94 tonnes, a 33% increase year-on-year
- Quarterly sales rose 8% to $2.51 million, with FY2025 revenue at $11.31 million (unaudited)
- Secured $1.86 million in new debt and equity funding, including a $1.15 million loan
- Ongoing debt restructuring discussions aiming for EBITDA-positive FY2026
Record Production and Revenue Growth
Cann Group Limited (ASX – CAN) closed out FY2025 with a standout quarter, reporting a record 2.05 tonnes of dried medicinal cannabis flower produced, a 41% jump from the previous quarter and the highest quarterly output in the company's history. This surge contributed to a full-year production total of 5.94 tonnes, marking a 33% increase compared to FY2024. Sales revenue for the quarter reached $2.51 million, an 8% increase quarter-on-quarter, bringing unaudited FY2025 revenue to $11.31 million.
Operational Efficiencies and Product Innovation
The production growth was driven by full-capacity cultivation and improved post-harvest efficiencies. Cann Group introduced five new cultivars with diverse THC profiles, spanning Indica, Sativa, and hybrid strains, which are gaining market traction. The company also progressed sustainability initiatives, including a government-backed CO₂ recovery project aimed at reducing emissions and operating costs, alongside UVC light trials to meet European export standards.
Financial Management and Funding
Despite higher production levels, Cann Group improved its net operating cash outflows by 13% quarter-on-quarter and an impressive 61% year-on-year, reflecting effective cost management. The company secured $1.86 million in new funding during the quarter, including a $1.15 million loan from Radium Capital and an oversubscribed private placement raising $0.71 million. Interest capitalisation rose slightly, indicating continued lender support amid ongoing debt obligations.
Strategic Outlook and Debt Restructuring
CEO Jenni Pilcher highlighted FY2025 as a year of reset and scale-up, laying the foundation for a stable and efficient business. The company is advancing discussions with lenders on a major debt restructuring expected to complete by September 2025. This restructuring aims to strengthen the balance sheet, reduce interest costs, and position Cann Group for an EBITDA-positive FY2026. Expansion of national distribution through new pharmacy retail agreements and progress on export initiatives, particularly targeting Europe, underpin the company’s growth strategy.
Navigating Market Challenges
Cann Group remains vigilant against external pressures such as unregulated imports and aggressive discounting in the domestic market. The company’s commitment to high-quality products and sustainable growth in Australia’s medicinal cannabis sector remains unwavering, supported by operational improvements in contract manufacturing and product packaging.
Bottom Line?
Cann Group’s record production and strategic funding set a promising stage, but successful debt restructuring will be key to unlocking sustainable profitability.
Questions in the middle?
- Will the upcoming debt restructuring materially reduce Cann Group’s interest burden and improve cash flow?
- How quickly can new cultivars and product innovations translate into sustained revenue growth?
- What impact will European export initiatives have amid regulatory and competitive challenges?
