Marijuana packaging firm KushCo raises $40 million in direct stock offering

California-based marijuana company KushCo Holdings said it expects to net about $40 million from the sale of securities in a direct offering to investors.

The provider of packaging and other ancillary products to the cannabis industry said it will use the proceeds to pay down its debt and for working capital, product development, acquisitions and other opportunities.

KushCo’s raise is only the latest example of a flurry of capital-raising activity in the cannabis industry.

Investor interest has risen in the wake of a more optimistic view of federal marijuana reform now that the Democrats control the US House, Senate and presidency.

KushCo said it entered into definitive agreements to sell 24.2 million shares of common stock, plus 9.7 million warrants at a combined offering price of $1.65 a share.

The warrants may be exercised at a price of $2 a share.

The closing of the offering, which was registered with the U.S. Securities and Exchange Commission, is expected on Feb. 24, subject to certain conditions.

KushCo shares trade on the U.S. over-the-counter markets as KSHB. The stock was trading at a little more than $1.50 a share on Tuesday.