Medical Cannabis Pioneer cbdMD Secures $1.2M To Fund Rollout Of Functional Mushroom Products

Medical marijuana producer cbdMD, Inc. YCBD YCBD said Friday that it had entered into a securities purchase agreement with five institutional investors to secure financing for the national rollout of its new ATRx Labs functional mushroom products. The company will use the proceeds for working capital as well.

The news came shortly after cbdMD began selling its two featured products, Apple Cider Vinegar (ACV) and Immunity Gummy Pouches through the grocery chain, Sprouts Farmers Market, which chose the company as a key brand for its CBD section.

Investors advanced the North Carolina-based company an aggregate of $1.25 million in gross proceeds. The company issued each investor a senior secured original issue discount convertible promissory note in the aggregate principal amount of $1,541,666, cbdMD announced in a press release.

The notes mature 18 months from the date of issuance and are convertible at the option of each investor into shares of the company’s common stock at an initial conversion price of $0.684 per share.

See also: CBD Giant’s Challenging Year: Q4 Net Sales Slide By 27% But Net Loss Narrows 67% YoY

cbdMD launched ATRx and hempMD brands in 2023, expanding its product channels into Amazon US and other more traditional consumer products channels that have historically precluded the sale of CBD products.

“The ATRx brand is designed to provide functional, non-cannabinoid health and wellness solutions to our customers, with an initial focus on the emerging functional mushroom market,” Ronan Kennedy, cbdMD's interim CEO and CFO said last month.

In 2024, the company plans to launch these new brands into the Amazon UK network in 2024, Kennedy continued.

“We are already in discussions about expanding the ATRx line in multiple brick-and-mortar retailers," Kennedy said in December.

Now read: cbdMD Reports Q3 2023 Performance: Net Loss Improves, Focus On Cost Management & Strategic Growth

YCBD Price Action

cbdMD's shares traded 4.44% lower at $0.71 per share after hours on Friday afternoon.

Benzinga Cannabis Conferences are coming to Los Angeles. Join the Benzinga Cannabis Market Spotlight: California, and unlock the future of cannabis at the premier networking event in Culver City on February 22. Connect with top industry leaders, gain insider insights into the investment landscape and shape the evolving markets in California and beyond. Don't miss this chance to be at the forefront of the cannabis industry's growth and innovation! Join now.