Medicinal cannabis company Cannasouth's planned purchase of the remaining 50 per cent of Cannasouth Cultivation Ltd (CCL) has fallen through after the company's $6 million capital raise came up short.
Waikato-based Cannasouth said it had raised $4.7m through the issue of 11.75m shares and 3.9m options.
For every three shares subscribed for in the offer, an investor received one option.
The unquoted two-year expiry options have an exercise price of 40c per share.
On July 5, Cannasouth said it was seeking to raise up to $6m to consolidate its operations by acquiring outstanding interests it does not already own, in each of Midwest Pharmaceutics NZ Limited and CCL to provide additional growth capital.
Acquisition of the outstanding 40 per cent shareholding in Midwest by Cannasouth was completed on July 31 but the acquisition of the outstanding 50 per cent shareholding in CCL was conditional on Cannasouth raising not less than $6m by September 30.
"Given $4.7 million was raised in the capital raising initiative, the condition in that agreement was not satisfied and the deed of sale and purchase of the outstanding interest in CCL has been terminated," Cannasouth said in a statement to the NZX.
Chairman Tony Ho said the company was pleased with the positive support the company had received from shareholders and investors, given the current environment, to have successfully raised $4.7 million of our targeted $6 million raise.
"We propose to commence further discussions with our JV partner, Aaron Craig, to review available options for the proposed acquisition of the outstanding 50 per cent of Cannasouth Cultivation to be achieved," he said.
Cannasouth Cultivation has built a state-of-the-art growing and processing facility in the Waikato to produce medicinal cannabis flower biomass.
Shares in NZX-listed Cannasouth last traded at 40c each.