The Elixinol Global Ltd (ASX: EXL) share price will be on watch this morning after the global distributor of industrial hemp based dietary supplements announced the successful completion of its institutional placement.
What was announced?
According to the release, Elixinol Global has raised $50 million through the issue of approximately 12.8 million shares at $3.90 per share to institutional investors. This represents an 8.7% discount to its last close price.
Management advised that it intends to use the proceeds to fund its ongoing expansion initiatives, with a particular focus on growing its USA CBD business.
In addition to this, the company will use the proceeds to expand its production facilities in Colorado by an additional ~23,000 square feet to more than double the company's current production capacity, undertake opportunistic strategic acquisitions, and enter joint ventures in select markets.
The company's chief executive officer, Paul Benhaim, appeared to be very pleased with the successful placement and believes it has left Elixinol Global very well positioned for growth.
He said: "I acknowledge the strong support of new and existing institutional investors to accelerate the Company's expansion in the US and globally. We are witnessing an unprecedented positive shift in consumer appetite for CBD and hemp derived products. Elixinol plans to double its current production capacity in the US. Further, by securing additional raw materials, the Company will be well positioned to accelerate the growth of Elixinol branded CBD products and strategic opportunities."
Also in the news this morning in the cannabis industry is Althea Group Holdings Ltd (ASX: AGH). Earlier today it revealed that Agriculture Victoria has granted its wholly owned subsidiary, Althea Company, an Authority for Low-THC Cannabis (Hemp Cultivation Licence) for commercial purposes relating to non-therapeutic use.
And on Tuesday the MGC Pharmaceuticals Ltd (ASX: MXC) share price climbed higher after it confirmed material revenue generation from its non-pharmaceutical business units during the June quarter.
