At the time of writing shares of Cann Group Ltd [ASX:CAN] trade at 39.5 cents, up 12.86%.
The CAN share price was up on news the medical cannabis company gained approval for new banking debt facilities.
Cann Group looks towards growth
The medical cannabis market is growing in Australia (slowly) and far quicker overseas.
The global market is set to expand to $44.4 billion by 2024.
Cann Group is positioning itself to capitalise on the explosive growth of the industry.
A recent announcement outlined the way forward for the company:
‘Cann Group received credit approval from National Australia Bank (NAB) for a $50 million secured debt facility.
‘The Company expects to complete execution of documentation with NAB within the next month.
‘The loan is a construction facility which will be used by Cann Group to complete the first stage of its state-of-the-art medicinal cannabis production site near Mildura.
‘The loan is being provided through NAB’s agribusiness division and represents a strong endorsement of Cann Group’s strategic growth plans.
‘The first stage of Mildura has an estimated 9 month build time, with first product expected to be processed and released by March 2022.’
What’s next for the Cann Group share price?
The company felt the disruptions of COVID-19, with Allan McCallum AO mentioning:
‘COVID- 19 impacted progress on several key fronts, including regulatory approvals, commercial activity and our planned debt financing.’
With the new debt facility in place and Victoria just recently announcing the state is COVID-19 free, progress should become easier.
Looking at the chart, the CAN share price fell 68.43% from the high in May to where it sits at the time of writing.
Should the price move up above the level of 39 cents, 45 cents may become the target.
If it happens to slide back, then the level of 31 cents may hold it up, proving to be strong in the past.
After an initial surge in the late-2017 pot stocks craze, CAN now holds a market cap of $94.47 million.
Making it a small company but one positioned to grow following today’s announcement.
As they look to capitalise on the medical cannabis market, this share may be one to keep an eye on in the future.
For Money Morning
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