The Little Green Pharma (ASX:LGP) share price dived 16% after this announcement

The Little Green Pharma Ltd (ASX: LGP) share price has fallen more than 16% this morning after the company announced a $22 million share placement. At the time of writing, the Little Green Pharma share price is trading at 78 cents, down 16.58%.

What's driving the Little Green Pharma share price?

Yesterday, the company announced its first exports of cannabis flower medicines to Germany. Little Green Pharma has manufactured Australian medical-grade cannabis products since August 2018.

The company today advised it has received 'firm commitments' to raise approximately $22 million (before costs). This will be executed via a share placement program for sophisticated, experienced and professional investors.

The company will issue a total of 34 million new fully paid ordinary shares at the price of 65 cents a share. Currently, Little Green Pharma has 82.6 million shares outstanding and a market capitalisation of $77.2 million. 

An additional share purchase plan to raise up to $5 million will also be offered to eligible shareholders, also at a fixed price of 65 cents per share.

Little Green Pharma will use the proceeds to accelerate sales and marketing activities, expand its cultivation and manufacturing capacity, and provide general working capital.

Here's why company executives are confident 

Regardless of the Little Green Pharma share price taking a 16% hit today, the company remains optimistic about its future.

Here's what managing director Fleta Solomon had to say about the upcoming share placement:

We're highly encouraged by the strong support shown by new and existing shareholders for Little Green Pharma.

Little Green Pharma has gone from strength to strength, and has achieved immense growth in the last year, most recently setting new records for quarterly revenue, unit sales, and patient numbers. We expect the next 12 months to be very exciting for the company and look forward to reporting on our continued success.

The Little Green Pharma share price has rocketed up by around 122% over the past 12 months.