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Pot stock Cann Group Ltd raises $60 million

The Cann Group Ltd (ASX: CAN) share price will be one to watch when it comes out of its trading halt today or on Monday.

What has happened?

After the market closed on Thursday Cann announced a fully underwritten $50 million institutional share placement and fully underwritten $10 million share purchase plan to raise a total of $60 million at $2.50 per share.

According to the release, the proceeds will be used to fund the company’s accelerated growth plans which include the construction of a phase three, large-scale cultivation facility and full GMP manufacturing capabilities.

Major shareholder Aurora Cannabis Inc has committed to participate in the placement and will increase its holding in Cann from 19.9% to 22.9%.

The C$3.2 billion cannabis giant has been on a shopping spree in Canada in recent weeks, so I’m not surprised to see it happy to increase its stake in Cann.

Should you invest?

It does look as though 2018 is going to be another exciting year for Australian pot stocks such as Cann, Auscann Group Holdings Ltd (ASX: AC8), and Creso Pharma Ltd (ASX: CPH).

These three companies in particular are cashed up and have a number of developments in the pipeline that could see them generating meaningful revenues in the near future.

While I plan to watch on from the sidelines, it will be with a keen interest.

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Returns as of 6th October 2020

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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