JERSEY-based medicinal cannabis producer Northern Leaf is closing in on an eleventh-hour multi-million-pound investment to save it from liquidation.
Chief executive Geoff Eyre said that, while it was “by no means yet a done deal”, the company was hoping to finalise a £2.5m three-year convertible loan with two investors who have “proven track records of successfully developing and operating highly profitable cannabis grows”.
This means the investors can convert the debt into equity in the company at any point during the three-year term, of either 80% – if Northern Leaf is valued at more than £100 million – or 90% – should it be valued at £100 million or less.
In a statement yesterday, the grower said it remained “in a precarious financial state” with less than £25,000 cash in the bank.
It explained that the investors had already provided £250,000 in April, without which the board of Northern Leaf would have had “no choice but to put the company into liquidation”.
The initial investment will be offset against the £2.5m.
Mr Eyre said: “Although by no means yet a done deal I am very pleased with the fundraising that the company has been able to secure in principle, which will not only avoid liquidation but I expect will be adequate to enable the business to achieve profitable, self-sustaining cashflow generation during Q4 2024.”
He added that he looked forward to finalising the transaction and working with investors to deliver on Northern Leaf’s “hitherto elusive, but nevertheless clear potential”.
