Cann Group’s $9M Capital Raise Fuels 50% Revenue Growth and Debt Slashing

• Capital raise of approximately AUD 9 million via placement and SPP
• Core debt slashed by 81% from AUD 75.4 million to AUD 14.5 million
• FY25 Botanitech branded flower sales doubled to AUD 4.4 million
• Operating expenses reduced by 35%, normalized EBITDA loss improved by 44%
• Forecast positive EBITDA and revenue growth of ~50% in FY26

A Strategic Capital Injection

Cann Group Limited (ASX – CAN), a leading Australian medicinal cannabis producer, has unveiled a significant capital raising initiative aimed at fueling its growth ambitions and stabilizing its financial footing. The company plans to raise up to AUD 9 million through a two-tranche placement and a Share Purchase Plan (SPP), with proceeds earmarked for working capital, production expansion, and partial settlement of its debt.

Debt Restructuring – A Game Changer

Central to Cann Group's announcement is a landmark agreement with National Australia Bank (NAB) to reduce its core debt by approximately 81%, from AUD 75.4 million to AUD 14.5 million. This restructuring includes a cash settlement of AUD 15.3 million and forgiveness of AUD 54.6 million in debt, dramatically lowering annual interest expenses by around AUD 3.4 million. The new debt facility, secured from an Australian private credit fund, carries a 12.5% interest rate and a two-year tenor, replacing the previous more burdensome arrangements.

Operational and Financial Momentum

FY25 results reflect a company on the mend. Botanitech, Cann’s flagship branded flower range, saw sales double to AUD 4.4 million, while total revenue reached AUD 13.3 million despite a strategic shift toward higher-margin products. Operating expenses were slashed by 35%, contributing to a 44% improvement in normalized EBITDA loss to negative AUD 5 million. Encouragingly, the company recorded its first positive EBITDA month in August 2025 and forecasts a 50% revenue increase to approximately AUD 17 million in FY26, alongside a positive EBITDA range of AUD 0.3 to 0.7 million.

Expanding Market Reach and Product Innovation

Cann Group operates one of the Southern Hemisphere’s most advanced GMP-certified cannabis production facilities in Mildura, Victoria. The company is expanding its product suite beyond dried flower to include oils, vapes, gummies, and white-label bulk flower sales. Its partnership with Chemist Warehouse has validated brand visibility and retail traction, with Botanitech products now available in over 70 outlets and plans to broaden distribution nationally. Internationally, Cann is pursuing export opportunities in the UK, Germany, Poland, and Malta, leveraging regulatory tailwinds and growing global demand for medicinal cannabis.

Looking Ahead – Profitability and Growth

The capital raise and debt restructure provide Cann Group with a strengthened balance sheet and enhanced liquidity to accelerate production scale-up and market expansion. The company’s strategic plan targets full-scale production of 8-10 tonnes annually and sustained profitability from FY26 onwards. While risks remain; including regulatory changes, agricultural challenges, and market competition; the company’s disciplined cost management, product innovation, and market positioning suggest a clear pathway to long-term growth.

Bottom Line?

Cann Group’s bold financial reset and growth strategy set the stage for a pivotal turnaround, with FY26 profitability within reach.

Questions in the middle?

• Will shareholder approvals for tranche two placement and attaching options proceed smoothly?
• How will Cann’s international expansion efforts impact revenue diversification and margins?
• Can the company sustain production yield improvements and cost efficiencies amid scaling?