The Althea Group Holdings Ltd (ASX: AGH) share price has come under pressure on Tuesday after returning from its trading halt.
In morning trade the cannabis company's shares were down as much as 11% to 43.5 cents.
The Althea share price has since recovered the majority of this decline and is now down just 2% to 48 cents at the time of writing.
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Why is the Althea share price under pressure?
This morning Althea's shares returned to trade following the completion of the institutional component of its capital raising.
According to the release, the company successfully raised $6 million via an institutional placement at a 10.2% discount of 44 cents per share.
Althea will now seek to raise a further $3 million via a share purchase plan at the same price.
Proceeds from the capital raising will be used to fund a range of growth initiatives across the Althea business. This includes sales and marketing, inventory, further development of the Althea Concierge platform, and product research and development.
Aphria selldown.
In addition to this capital raising, the company revealed that major shareholder Aphria engaged PAC Partners Securities to undertake an off-market share transfer of its remaining 12.25 million shares in the company. This represents the equivalent of 5.25% of Althea's issued shares.
The release explains that the US$2.3 billion cannabis giant sold the shares for 41 cents per share, which was a discount of 16.3% to its last close price.
PAC Partners Securities has advised Althea that it has brokered the requested trade with several institutional investors, who also participated in the company's recent placement.
Importantly, Althea's commercial relationship with Aphria remains unchanged.
Management commentary.
Althea's CEO, Josh Fegan, commented: "We have continued to foster strong growth across the Althea business as the expansion of the global medicinal cannabis industry rapidly accelerates. In line with the expansion of the industry, Althea is well positioned to further increase its significant market share."
"This additional funding support delivered through both the Placement and the SPP allows us to accelerate our growth strategy across several key strategic initiatives, as we continue to capitalise on our position as one of the global leaders in the medicinal cannabis industry. We thank existing and new shareholders for their support and look forward to updating the market as the company continues to achieve significant growth milestones across all international territories and business units," he concluded.
