Nevada cannabis cultivator Flower One raises $5 million in private placement

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Nevada cannabis cultivator Flower One Holdings raised $5 million in the first tranche of a non-brokered private placement.

Flower One has the option to increase the size of the private placement by an additional $10 million.

Proceeds will be used “for implementing critical improvements to (Flower One’s) facilities and for general corporate and working capital purposes,” according to a Monday news release.

Flower One restructured its convertible debentures to reduce its debt earlier this year.

“As we have indicated since the restructuring, there are critical improvements that need to be made to the facility in order to assure we are able to produce at the quality and consistency levels required to achieve our corporate objectives,” Flower One CEO Kellen O’Keefe, formerly of MedMen, said in the release.

Under the private placement, Flower One issued 50 million units, which each include one common share and one share purchase warrant exercisable at $0.25 for three years.

Flower One can accelerate the expiry date of the warrants under certain conditions.

The Las Vegas- and Toronto-based company describes itself as “the largest cannabis cultivator, producer, and full-service brand fulfillment partner” in Nevada.

The company has a primary greenhouse and production facility and a second site that includes an indoor cultivation facility and a kitchen.

Flower One shares trade as FONE on the Canadian Securities Exchange and FLOOF on over-the-counter markets.