Cann Group (ASX:CAN) has been hit by a cyber attack, and the early signs don’t look good.

The Victoria-based cannabis company has spent the last few years constructing two production facilities, including a 34,000 sq/m growing facility in Mildura.

In connection with the Mildura facility’s construction, the company paid $3.6m to what it referred to as an “overseas contractor”.

But in an announcement this morning, CAN said it wasn’t actually paying who it thought it was paying.

Cann Group cyber attack

Instead, the money went to someone else as part a “complex and sophisticated cyber fraud perpetrated against the company and its overseas contractor”, CAN said.

At this stage, Cann Group doesn’t know the identity of the cyber thief, which it described as an “unknown third party”.

CAN shares came out of a trading halt that it requested on Friday, and fell by around six per cent at the opening bell to 62c.

The company said it’s taken immediate action to bolster up the security around its IT systems.

It’s not fully sure yet if the lost funds are insured, but has commenced the process of making enquiries to its insurance company to determine if its eligible for a claim to be made on the lost monies.

The Cann Group cyber attack is the latest example of the increasing threat posed to Aussie businesses by globally co-ordinated cyber criminals.

CAN is also “working with its bank to determine if any of the payments can be halted and if any of the funds involved are recoverable”.

“The matter has been reported to police in Victoria, Australia, the Netherlands and Hong Kong, as well as the Office of Drug Control,” the company said.

In early January, CAN announced it had invested $C1m in a German-based distribution company in return for an exclusive supply agreement

The company closed the deal on a $50m debt funding facility with National Australia Bank (NAB) last November.

In its 4C filing for the December quarter, CAN booked operating cash outflows of $5.314m on cash receipts of $99,000.

The company finished the quarter with $27.766m cash in the bank.

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