Cannara Biotech Secures $10M Credit Expansion for Valleyfield Facility Growth

MONTREAL – Cannara Biotech Inc., has announced a $10 million expansion of its credit facility with Bank of Montreal (BMO) to fund enhancements at its Valleyfield, Quebec, facility. This strategic move supports the company’s ambition to reach an annual production capacity of 100,000 kilograms of premium-grade Cannabis, leveraging its two Quebec-based facilities spanning over 1.65 million square feet.

The new $10 million Capital Expenditures Facility, part of the Restated Credit Facility with BMO, allows multiple draws through July 2026, with repayments structured over a 10-year amortization schedule, concluding on December 31, 2027. The funds will drive the initial phase of Valleyfield’s post-harvest expansion, introducing advanced hang-drying, freezing, trimming, and packaging systems, alongside expanded processing, storage, and butane extraction capabilities. These upgrades will enable Cannara to activate additional cultivation zones beyond the current 12, scaling production to meet growing demand in Canada’s competitive Cannabis market.

“This amendment reflects BMO’s confidence in our growth strategy and operational strength,” said Zohar Krivorot, President and CEO of Cannara.

The announcement builds on prior financial optimizations. In June 2025, Cannara secured a 50-basis-point interest rate reduction in two stages, followed by an additional 25-basis-point cut in Q4 2025, bringing the cost of debt below 6% from over 8% in 2024. In March 2025, the company eliminated a limited recourse guarantee, saving approximately $375,000 annually in interest expenses. These milestones underscore Cannara’s disciplined capital management and operational efficiency.

Recent performance highlights Cannara’s momentum. In Q3 2025, the company reported record revenue, EBITDA, and free cash flow, achieving a 50,000 kg capacity milestone ahead of schedule and securing five vape SKUs for Quebec’s market. A $5.5 million asset sale in August 2025 further strengthened its balance sheet.

The Cannabis industry faces intense competition and regulatory complexities, but Cannara’s focus on non-dilutive financing and operational scalability positions it favorably. The $10 million credit upsize signals confidence in its ability to capture market share while managing risks like potential oversupply or shifting consumer preferences.

Cannara’s strategic investments and cost efficiencies suggest a robust path forward. Investors should monitor upcoming financials to assess how these upgrades translate into revenue growth and market expansion in Canada’s dynamic Cannabis sector.