- Little Green Pharma (LGP) is planning to acquire a Denmark cannabis facility after raising $27.2 million in funding via a share placement
- The ASX-listed cannabis stock says $15 million of that figure will come from Hancock Prospecting, which is owned by Australian billionaire Gina Rinehart
- Once the placement is finalised, Hancock Prospecting will hold a 10 per cent stake in LGP, which plans to issue 45.3 million shares at 60 cents each
- The company will use the funds from the placement to pay for the C$20 million (A$21.47 million) Denmark business
- LGP shares are up 8.46 per cent at 70.5 cents each at 1:50 pm AEST
Little Green Pharma (LGP) is planning to acquire a Denmark cannabis facility after successfully raising $27.2 million in funding via a share placement.
The ASX-listed cannabis stock came out of a trading halt on Tuesday to announce the capital raise and acquisition news.
LGP said it had received firm commitments to raise $27.2 million with $15 million of that figure to come from Hancock Prospecting, which is owned by Australian billionaire Gina Rinehart.
Under the share placement, Little Green Pharma is set to issue 45.3 million LGP shares at 60 cents each, with Rinehart's business set to walk away with a 10 per cent stake in the cannabis company.
Hancock Prospecting’s General Manager of Business Development Dan Wade said: "In supporting LGP's investment in its new facility and becoming a substantial shareholder, we hope to help many thousands of Australian and overseas patients access much-needed cannabis medicines.
"We believe medicinal cannabis has a vital role in helping to treat a range of chronic conditions, and we’re pleased to support an Australian medicinal cannabis company in LGP that continues to put patients first and contribute to the development of this helpful and emerging industry."
LGP will use the funds for the placement to pay leading Canadian cannabis stock Canopy Growth Corporation C$20 million (A$21.47 million) for a Denmark cannabis business.
LGP said the facility was fully operational and had capacity to produce in excess of 20 tonnes of biomass per annum, including 12 tonnes per annum of dried cannabis flower.
LGP Managing Director Fleta Solomon said the acquisition was a step change for the company.
"We have been speaking for some time about the need to increase our production capacity and the Denmark facility not only gives us the cultivation and manufacturing capacity we need, but does so immediately," she said.
"We won’t be constrained by the two-year build and permitting time
required to expand our existing West Australian facility."
LGP expects the shares issued under this recent share placement to settle by June 28.
Following today's news, shares in LGP were trading up 8.46 per cent at 70.5 cents each at 1:50 pm AEST.