It has been another week of positive developments for the cannabis industry across Europe, with yet more markets making progress on cannabis liberalisation.
Germany’s efforts to accelerate the roll-out of its recreational market looked to be paying off, as expert hearings taking place throughout June promise to see draft laws ready by the end of the year.
Meanwhile Spain made another significant step towards legalising medical cannabis, and Luxembourg pushed ahead with legislation which would allow for self-cultivation.
Despite the positive developments companies continued to face wider economic headwinds as inflation, record lows in consumer confidence and a drop in retail spending all weighed on stock prices.
Akanda announced a dramatic overhaul of its board of directors on Thursday (June 23), seeing ‘concerned shareholders’ depose every director except CEO Tej Virk.
Just three months after the British-based cannabis company listed on the NASDAQ stock exchange, its shareholders have pushed through a coup at the company’s boardroom, ousting six directors ‘with immediate effect’ and replacing them with what it called ‘highly qualified and motivated directors’.
The ‘concerned shareholders’, who reportedly represent 16,556,799 shares in the company, or just over 54%, were led by ‘long-standing shareholder’ David Jenkins, who owns a 6.8% stake.
Mr Jenkins is understood to have reached out to the board previously regarding his frustration at the ‘lack of oversight and strategic direction of the corporation’, though he failed to detail his concerns any further.
According to a statement from the company, the shareholders believed that an ‘immediate change was necessary in order to prevent the potentially irreparable harm to the corporation that may have been caused if the former directors attempted a strategy of entrenchment’.
Mr Jenkins commented: “As a long-term investor in Akanda, I wish to see Akanda managed prudently and professionally, with a view to the long-term best interests of the corporation. I am grateful for the support of my fellow shareholders who shared my concerns, and I look forward to a brighter future for all Akanda shareholders.”
The move has seen Executive Chairman and founder of Akanda’s subsidiary Bophelo Bioscience Louisa Mojela removed, alongside Philip van den Berg, the CEO of Halo Tek and former CFO of Halo Collective, which owns a 44% stake in Akanda.
Charles Kié, Gila Jones, Gugu Dingaan and Bridget Baker have also been ousted, with Harvinder Singh, Mohsen Rahimi, Jatinder Dhaliwal and Kathryn Field, the current President of Halo Collective, being elected to fill the vacancies.
The new directors will ‘serve the remaining terms of the outgoing directors’ or remain in their positions until ‘their successors are elected or appointed’.
It comes after months of share price decline for Akanda, which has seen a dramatic fall from grace since trading well above its listing price for its first two months.
Akanda’s stock dropped 15% throughout the week, but the effects of the boardroom overhaul are yet to be fully realised on the stock market.
The CBD and wellness brand made its most significant rise on the Aquis Exchange since February this week, just weeks after it announced plans to de-list its stocks in Canada.
Goodbody Health has seen its stock rise nearly 20% this week, jumping to 1.35p from all-time lows of 1.15p, recovering from a downward trend that has remained unbroken since early February, just days after it first listed.
It came amid numerous announcements, including news published at the end of last week that Goodbody has successfully passed the registration criteria for the Care Quality Commission (CQC).
Goodbody will now provide all its testing services, which have been its main driver of revenue since the start of the pandemic, ‘under the regulated activity diagnostic and screening procedures’.
It is understood the move will allow the company to officially provide full private diagnostics and apply for an NHS listing.
Days later it revealed plans to expand its relationship with Everything Genetic, which it worked with to facilitate COVID-19 lateral flow tests previously, and offer genetic cancer and heart disease tests through its now 200+ partnered clinics.
While some investors hailed the news, seeing it as a signal that Goodbody is expanding and diversifying its lucrative testing operation, and growing ‘from COVID-19 testing to the wellness market online’, others raised concerns about its pace of growth.
A number of investors highlighted predictions from analyst group Arden published earlier this year, alongside an interview with the group’s CEO Marc Howells in May, both of which suggested a rapid expansion into pharmacies throughout this year, cautioning that this rapid expansion doesn’t yet look to have been achieved.
On the CBD front, the company’s founder and Executive Chairman Geremy Thomas told BusinessCann in a recent interview that while Goodbody is ‘absolutely rooted’ in the CBD market, it has been ‘less keen to chase sales in the UK whilst the regulatory environment has been unclear and the government has not been supportive’.
He added that when ‘the conditions are right, then we’ll be back with a vengeance.
Chill Brands also made gains this week, seeing its share price increase around 6%.
It came as the company announced that it had completed its acquisition of the Chill.com web domain, a contentious issue for many shareholders.
The domain, which is thought to have cost the company around £1.3m in total, including around £650k of its recent £4m fundraise, is a core part of the CBD brand’s future strategy.
Following numerous setbacks in its supply chain and physical roll-out of products, the brand is placing a renewed focus on its online operation.
While Chill said the completion will allow it to focus on refreshing ‘the brand’s identity and renew the company’s focus on marketing products’, investors seemed to be relieved this would no longer be a drain on the company’s cash supplies.
The refresh will focus on the brand’s identity and renew the company’s focus on marketing products containing CBD and other natural ingredients as functional, fun and relaxing. Updates to the company’s websites and social media channels will follow in line with this exercise.
Now the domain is fully paid off, Chill says it will prioritise SEO, user experience and email marketing campaigns to bring in more traffic to the site, which now receives 10,000 unique visitors a month.
The site, which currently only sells products to US customers, will also begin work onboarding its UK website chillthewayuk.com, and will reportedly begin exploring the addition of ‘non-competing’ products as it angles to become an online marketplace in a bid to drive more revenue.