Struggling cannabis grower's CEO announces resignation

CEO Peter Koetsier has given notice of his resignation from the position as CEO for family reasons, the ASX was told today (Thursday).

Director Ms Jenni Pilcher will assume an executive director role at the company "while the board sets its new strategic direction".

Mr Koetsier is expected to finish up at the end of the financial year after joining Cann Group early last year.

"I want to express my deepest gratitude to the board, employees, and stakeholders of Cann for their support and collaboration during my time as CEO. I am truly grateful for the opportunity to have worked alongside such talented and dedicated individuals," he said in a statement.

Cann Group chairman, Dr Julian Chick, said: "We are grateful for Peter's efforts over the past 14 months in scaling up of our business which has led to the production of over 12 tonnes of product per annum, and increased sales. I wish Peter well in his next endeavour."

Cann Group is selling off assets to work its way out of financial trouble.

Australia's first licenced medicinal cannabis grower remains suspended on the stock exchange.

Share trading in the publicly-listed and Mildura-based Cann Group was suspended as the company works to find new finance sources.

Cann Group reported a net loss of $14,338,000 in the first six months of last year on the back of an almost $19 million loss the period before.

The company informed the ASX this week it was selling surplus equipment for $1.7 million to a rival cannabis grower in Victoria.

The company also said it had negotiated an extension of its debt financing arrangement with NAB for several months, to March 2025.

It had also been able to defer the repayment of loans to NAB to next year as well.

"Cann continues to pursue additional funding options available to the company," the ASX was told.

Cann Group is an Australian-based company working to develop, produce and supply innovative cannabis medicines.

Victoria has been aiming to become Australia's home of cannabis production with investments in Mildura, Melbourne and Shepparton.

Established in 2014, Cann Group began with two medicinal cannabis processing facilities based in Melbourne and in 2019 entered an agreement with the Mildura Rural City Council over the purchase of a $10.75 million site to locate a greenhouse and production facility.

The Mildura operation includes glasshouses and 12,000 square metres of processing and manufacturing facilities.

It was the first company to be issued with a Cannabis Research Licence by the government's Office of Drug Control in February 2017.

In March that same year, Cann Group was issued Australia's first Medicinal Cannabis Cultivation Licence, which authorised Cann to produce Australian-grown cannabis (in association a relevant permit) for medicinal purposes.

Cann Group said it hoped it would be able to cultivate up to 50 tonnes of medical cannabis in dried flower form a year.

It made $8.5m of cannabis sales in the second half of last year, revenue was up 46 per cent on the first half of the year.

The company's debt is around $64m.

"On the basis the company is successful in its pursuit of additional financing, the directors are of the opinion the company is a going concern," the company has told shareholders.

Shares traded at about $1 at the start of the year and fell to around six cents apiece when trading was halted.

Cann Group's founding director and chairman Allan McCallum retired from the board in late August after nine years of involvement and was replaced by Dr Julian Chick as chair.

Deborah Ambrosini departed as chief financial officer in late December to be replaced by Tony Di Pietro starting in April.

Auditors William Buck said in their report on the last half-yearly report which triggered the ASX suspension they had been unable to confirm the group's ability to secure the necessary finance to "support the group as a going concern" over the next 12 months.

Cann Group told the ASX this week it had "reached terms" with Biortica Agrimed Ltd for the sale of equipment surplus to its needs.

The sale price was $1.7 million agreed to be paid before June 30.

Biortica Agrimed Ltd claims to be Australia's largest producer of medicinal cannabis with a growing factory at Bunyip in Gippsland and operations also in Lismore, NSW.

Cann Group said it had extended the company's debt facility agreement with NAB.

Cann's working capital facility of $15.6 million (which is fully drawn down), has been extended from November 30, 2024 to March 31, 2025.