Celadon Pharmaceuticals
UK-based medical cannabis producer Celadon Pharmaceuticals has seen its stock tank by 40% this week as its funding crisis hits a critical juncture.
Amid further delays on two separate sources of funding, Celadon informed investors that should no funding be received before January 2025, it was likely to run out of cash.
With just £0.3m in the bank as of November 15, the company suggested that ‘based on current internal forecasts, which assumes ongoing careful management of the cash and creditor position, and assuming expected cash receipts from customer sales, absent any funds from the subscriber or lender the company has sufficient working capital through to January 2025.’
Celadon first revealed in August that despite seeing ongoing shipments of product to clients as part of multi-million-pound supply agreements, payment from two separate sources of credit had been delayed, forcing it to ‘manage its cash position’ even more tightly.
The first related to a £2.1m equity fundraise launched in May this year, in which one investor agreed to purchase £1m in new shares, with the payments set to be split into four separate tranches.
Meanwhile, a £7m credit facility secured in May 2023, before being extended a year later, moving the expiry date from May 2025 to November 2025, was also delayed.
In an update in September, amid the company’s interim results, Celadon said it had received £0.3m in funding to date in relation to the £1m drawdown request on the Group’s £7m committed credit facility.
Alongside the £0.7m owed to it from this credit facility, Celadon said it is also yet to receive £0.4m from the May fundraise, which was initially due in August.
At the time, its CEO James Short said that these delays ‘in receiving funding from a committed shareholder and lender have caused the progress of the business to slow.’
In a further update this week, Celadon said that while it had received a further £0.2m from its lender, helping with short-term cash needs, it is still waiting for the £0.5m.
This funding is reportedly dependent on the lender selling one of their investments, and there is no way to predict if or when that might happen.
As for the £0.4m owed by the subscriber, Celadon says that while it ‘remains in correspondence with the subscriber who continues to communicate an intention to pay all monies owed’, it cannot guarantee ‘certainty or receipt’ of funds.
According to the company, it remains in discussions with a single finance provider in regards to alternative funding, and the directors ‘do not consider these discussions to have progressed materially since the interim results’.
The company however continues to seek to engage to provide longer-term capital to the business.
Denmark’s medical cannabis update boosts stocks
Danish medical cannabis operators Stenocare and DanCann Pharma have both seen their stock prices spike by over 50% this week after the government announced plans to make its medical cannabis scheme permanent.
This week, Minister of the Interior and Health Sophie Løhde met with the parties behind Denmark’s trial scheme, which has been running since 2018, to discuss plans to make the scheme permanent.
To date, 20,000 prescriptions have reportedly been redeemed by 1800 patients via the scheme.
Business of Cannabis will be publishing a deep dive into these developments in the coming days.
For Stenocare, which has been forced to lower its sales forecasts twice in three months due to issues within the Danish market, this news will come as a welcome reprieve.
Over the last two months, Stenocare has seen its stock drop by around 40%, however the news has seen its stock price recover to levels not seen since September.
Its CEO, Thomas Skovlund Schnegelsberg, tells Business of Cannabis he believes this will lead to an expansion of the Danish market.
DanCann Pharma meanwhile, has also seen its stock fall by around 60% over the past two months but has similarly seen this recover significantly following the government update.
TilrayÂ
US cannabis giant Tilray announced this week that it has continued to strengthen its foothold in Europe’s largest medical cannabis market, launching its first commercial German-grown medical cannabis flower.
In July, Tilray announced that it had become the first company in half a decade to recieve a new domestic cannabis cultivation licence in Germany.
Tilray’s European subsidiary Aphria RX GmbH, which it acquired in 2021, confirmed that it has received the first new domestic cultivation licence since the passage of MedCanG in April, which removed tight restrictions on who is able to cultivate in the country.
Aphria RX was already one of just three companies, alongside Germany’s Demecan and Canada’s Aurora Cannabis, to have been granted a licence in May 2019 after winning a highly competitive tender process.
This week, Aphria RX has launched the first range of medical cannabis products grown in Germany under its newly issued cultivation licence.
Tilray’s Chief Strategy Officer and Head of International, Denise Faltischek, said: “We are excited to launch our Made in Germany premium cannabis products, which marks a significant milestone in our mission to deliver the highest-quality medical cannabis products to patients in Germany.
“This not only serves to expand Tilray’s leadership in medical cannabis cultivation, production and distribution in Germany but also proves our commitment to be one of the most responsible, trusted and market leading cannabis companies in the world with a portfolio of innovative and high-quality products that address the needs of patients.”
