The financing consists of a note carrying an 8% annual interest rate, which escalates to 14% in the event of a default. Notably, the debt is structured to be satisfied exclusively through the issuance of common shares rather than cash repayments. The conversion price is pegged to either a fixed rate of US$0.122 or 90% of the volume-weighted average price over the 20 trading days preceding conversion, protected by a floor price of US$0.02436.

Alongside the note, the lender received warrants to purchase up to 2,052,545 common shares at an exercise price of C$0.17, valid until August 7, 2031. IM Cannabis, which maintains medical cannabis operations across Israel and Germany, has committed to reserving sufficient shares for these conversions and plans to file a resale registration statement with the U.S. Securities and Exchange Commission to satisfy its contractual obligations to the lender.