MEDICINAL cannabis company Cann Group has told investors it plans to become operationally profitable next financial year.
Outlining a four year growth plan, including the potential expansion of its Mildura facility and an aim to become cash flow positive in the 2026 financial year, the company is looking to forge ahead after what it self-described as “undoubtedly a reset quarter”.
Back at the start of March, Cann suspended trading on the Australian Securities Exchange for two months, as share prices had fallen to $0.06 per share.
The decision was made after an independent audit by William Buck cast doubt on the company’s ability to remain a going concern beyond March 2025 in its efforts to repay a $64.1 million debt.
William Buck acknowledged material uncertainty continued to exist after the company obtained $5 million in secured debt financing from a private credit lender, and re-released its half year results on May 8.
Since then, the company secured $1.78 million for selling surplus assets, and its shares returned to trading on June 4.
Chief executive and managing director Jenni Pilcher said Cann completed a restructure of 10 roles across the company in March, to reset its operating cost base.
“The company did experience a loss in sales momentum during the ASX suspension,” Ms Pilcher said.
“Pleasingly, sales are now increasing post the suspension.
“The company also came under a lot of scrutiny from suppliers which took time and resources to manage, however we have successfully navigated through this.
“The company is now in a solid position to execute on its strategy which is outlined in our investor update released on 24 July.”
In the investor update, Cann declared a focus on scaling up production in the two commissioned zones of its Mildura facility, as it planned to restructure its debt in the current financial year and begin repaying its debt from its operational cash flows next financial year.
Central to the approach was a planned expansion of Cann’s Botanitech product range, and an increase in the range of cannabis cultivars it grew in Mildura.
“Our primary focus is on the expansion of our Botanitech brand, which has a diverse product range including flower, oils, vapes and capsules, all in various strengths,” Ms Pilcher said.
“Revenues from Botanitech will be supplemented from the sales of bulk dried flower, white label flower and oils, and GMP services.
“We have sourced unique genetics from established international breeders, primarily from North America.
“These elite varieties have been locally phenotyped and/or bred and at our R&D facility in Melbourne, together with our industry partners, and are now being cultivated commercially in Mildura.
“These will be available for patients via our Botanitech brand from September onwards.
“We are also actively seeking other alternatives to repaying debt such as a sale and leaseback of the Mildura facility.
“When the debt will be repaid in full will depend on which mix of options the company undertakes.”
At present, 23 per cent of the Cann’s Mildura glass house is operational, and it has a 10-tonne production capacity.
Cann said there is an opportunity to expand production at the facility four-fold with further investment from the 2026/27 financial year onwards.
