General Cannabis Raises Close To $3M In New Capital, Retires Current Debt

Cannabis company General Cannabis Corp. CANN revealed Monday it has raised more than $2.9 million in senior convertible promissory notes.

The Colorado-based company aims to improve its financial situation, restructure debt, advance operating cash and minimize interest expenses.

So far, General Cannabis extinguished over $2 million of its short-term debt that had an annual interest rate of 15% due in the first quarter of 2021, and replaced it with notes.

The new notes are set to mature in December  2023, bear a 10% annual coupon, and are not set to pay cash interest before 2020, providing the company with more financial flexibility in the meantime. Note holders obtained warrants to buy up to 20% of the value of their notes in common stock at a price of $0.56 per share.

General Cannabis noted that every member of its board supported the raise.

One of the company's biggest shareholders, SevenFive Farm founder Barker Dalton, waived his right to put one-quarter of his shares to the company in return for money.

 “I am excited about the future for General Cannabis.  I am aligned with my fellow board members and the management team; our overriding goal is to drive shareholder value. Waiving my put right gives the company more flexibility to use cash for value-creating purposes,” stated Dalton.

SevenFive Farm is a subsidiary of General Cannabis.

In a prepared statement, General Cannabis CEO Steve Gutterman expressed gratitude toward Dalton and the other shareholders.

“We are also deeply appreciative of Barker’s waiver," Gutterman said. "He continues to be a fantastic partner. We are entirely focused on getting to cash flow positive and executing on our roll-up strategy, and today’s announcements are important steps towards achieving our goals."