The Cann Group Ltd (ASX: CAN) share price has continued its sensational run and is rocketing higher again on Wednesday.
In afternoon trade the cannabis company's shares are up a further 12% to 56.5 cents.
This means the Cann Group share price is now up an incredible 76% week to date.
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Why is the Cann Group share price rocketing higher this week?
Investors have been fighting to get hold of the company's shares this week after the release of an update on its debt facility.
On Monday, Cann revealed that it has received credit approval from National Australia Bank (ASX: NAB) for a $50 million secured debt facility.
These funds will be used to complete the first stage of its state-of-the-art medicinal cannabis production site near Mildura. The first stage has an estimated nine month build time, with its first product expected to be processed and released by March 2022.
Once complete, the first stage of the project will provide annual capacity to produce 12,500 kgs of dry flower equivalent.
Work is expected to be underway in February 2021, with the total project cost estimated to be $112 million. Approximately $53 million has already spent on site works and the facility superstructure. The company plans to fund the balance with the new bank loan facility and its current cash reserves.
Why is the Cann Group share price smoking the market today?
There's no point building such an enormous facility if you don't have licences, right?
The good news is that this afternoon the company received notice from the Australian Department of Health's Office of Drug Control (ODC) that its existing licences (for cultivation and production of medicinal cannabis, research activities in relation to medicinal cannabis, and manufacture of medicinal cannabis products) can be extended to its new Mildura facility.
Each ODC Licence includes a condition that Cann Group must provide the ODC with evidence that an independent security assessment has been undertaken on the Mildura facility, once it has been constructed.
Cann Group's CEO, Peter Crock, believes that in addition to having the finance in place to build the state-of-the-art facility near Mildura, having the requisite licences in place will enable the Mildura facility's production to come on-line from a regulatory perspective.
He commented: "The variation to our licences will enable us to proceed with certainty in respect of the building of the facility and moving into cultivation, production and manufacture from the facility seamlessly. We are on track to be processing and releasing material from our Mildura facility by the end of the first quarter of calendar year 2022."
