MedReleaf Australia Announces Closing of Oversubscribed Financing
Announcement posted by MedReleaf Australia 30 Jun 2021
Brisbane, QLD, Australia – June 30, 2021 – Indica Industries Pty Ltd. T/A MedReleaf Australia (“MedReleaf” or the “Company”), a private Queensland-based company operating within Australia’s medical cannabis framework, is pleased to announce that it has closed a non-brokered private placement financing of common shares at a price of A$21.00 per share for gross proceeds of A$3.9 million (the “Offering”), an oversubscription of A$0.9 million from MedReleaf’s originally contemplated maximum offering size.
The proceeds from the Offering will be used for expanding sales and marketing, inventory, education, regulatory compliance, research and development and general corporate purposes.
MedReleaf received global interest in the Offering, with participants including, among others, a Canadian-based institutional investor, certain founders of two of Canada’s largest cannabis companies, and current shareholders.
“We are delighted to receive such strong support for MedReleaf Australia from both our current shareholder base and also new investors. We are maintaining our emphasis on low capital intensity operations, and the majority of the funds raised in this financing will go directly into sales and marketing, health professional education and other proven growth initiatives,” commented Russell Harding, MedReleaf’s CEO.
Cam Battley, MedReleaf’s Managing Director said, “Our investors are tracking the rapid growth of the Australian medical cannabis system, and seeing parallels with the early years of Canada’s medical cannabis market. MedReleaf’s strategy has been to build the Company on solid foundations, following sound business practices and commercial principles. As a business and as a Board, we remain tightly focused on serving patients and health professionals particularly well, continuing to gain market share, and maintaining a frugal cost structure with a paramount objective of early and sustained profitability.”
Sales Growth and Profitability: MedReleaf has experienced quarter over quarter sales growth of 42%, and 82%, respectively, over the last two quarters ending Q1 2021. In addition, MedReleaf’s low burn rate relative to many of its peers in the Australian cannabis industry has allowed the Company to achieve operational profitability.
Current Initiatives: MedReleaf has submitted product registrations for entry into the New Zealand medical cannabis market, and is currently focused on expanding its product offering, as well as developing further relationships within the medical cannabis community.
Everleaf Capital Corp. acted as strategic advisor and Stikeman Elliott LLP acted as legal counsel to MedReleaf.
MedReleaf Australia is a fully licenced, private company operating in the Australian medical cannabis system since 2016, supplying a wide range of products to patients nationally. MedReleaf is the exclusive supplier of Aurora Cannabis Inc’s (NASDAQ: ACB) (TSX: ACB) MedReleaf, Aurora and CanniMed brands in Australia and New Zealand, and Aurora holds a 10% ownership stake in MedReleaf. MedReleaf is one of the six founding members of the trade association Medicinal Cannabis Industry Australia (MCIA).
Russell Harding – CEO Cam Battley – Managing Director
Certain information included in this press release constitutes forward-looking information under applicable securities legislation. Forward-looking information typically contains statements with words such as "anticipate", "believe", "expect", "plan", "intend", "estimate", "propose", "project", "will" or similar words suggesting future outcomes or statements regarding an outlook. Forward-looking information in this press release may include, but is not limited to, statements concerning the use of proceeds from the Offering, future sales growth and profitability, and the business plan of the Company, generally, including additional product lines and entry into the New Zealand market. The forward-looking statements contained in this press release are based on certain key expectations and assumptions made by MedReleaf. Although MedReleaf believes that the expectations and assumptions on which the forward-looking statements are based are reasonable, undue reliance should not be placed on the forward-looking statements because MedReleaf can give no assurance that they will prove to be correct. Since forward-looking statements address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of factors and risks. These include, but are not limited to, risks associated with the medical cannabis industry in general, constraint in the availability of products and services, the current COVID-19 pandemic, changes in legislation impacting the cannabis industry and the competitive landscape.
The forward-looking information contained in this press release is made as of the date hereof and MedReleaf undertakes no obligation to update publicly or revise any forward-looking information, whether as a result of new information, future events or otherwise, unless required by applicable securities laws. The forward-looking information contained in this press release is expressly qualified by this cautionary statement.