CELLULAR Goods has released its first significant update since announcing that its ingestibles products were not legally allowed to be sold in the UK.
At the end of last week (Thursday May 12) the British CBD company revealed a number of ‘key changes to its team of independent directors’, following the departure of high-profile Chairman Peter Wall and two other directors.
Three new directors have now been appointed ‘effective immediately’, bringing yet more fresh blood to the company following a string of c-level replacements over the last six months.
While investors have generally reacted positively to the new hires, the unproven board, now limited product range and ongoing departures mean the company has its work cut out to regain the confidence of investors.
The outgoing chairman Mr Wall, who has been with Cellular Goods since December 2020, said he is stepping down from his role ‘in order to devote more time to his existing executive roles’, but will remain at the company as a Non-Executive Director.
Mr Wall is also CEO of Argo Blockchain, which saw its share price skyrocket from 10p to peaks of £2.82 in less than six months under his leadership, alongside triple digit increases in profits and revenues.
In the run up to Cellular Goods’ IPO in early 2021, many early investors cited Mr Wall’s inclusion on the board as a key reason for their support, hoping he could help recreate the runaway success of Argo.
With Cellular Good’s stock continuing its downward trend and Argo’s own stock falling back to 50p, there has been growing concern among investors over the value Mr Wall is bringing to the board.
He will be succeeded by Non-Executive Director Darcy Taylor, who said: “I’m delighted to accept the baton from Peter as Cellular Goods embarks on the next phase of its development.”
Similarly David Gardner will also be leaving the board ‘due to time commitments at his other business interests’.
Mr Gardner, a Premier League football and entertainment agent, is understood to have been instrumental in bringing David Beckham onboard as an investor, another high profile draw for many early stakeholders in the company.
He will be replaced by Gill Whitty-Collins, who is the second senior hire from consumer health giant Procter & Gamble to join Cellular Goods this year.
During her 25-year stint at P&G, Ms Whitty-Collins acted as Senior Vice President for Beauty Care, leading global brands including Olay, Always and Pantene.
Furthermore, Ross Connolly, another close associate of Mr Beckham and Commercial Director at David Beckham Ventures, will be replaced by senior marketing executive Misha Sher, who is credited with spearheading growth at MediaCom during his tenure.
Many investors have hailed this changing of the guard, praising the shift in focus away from figures able to bring in new investors and towards those with the experience to build and sell its product offering.
Following the appointment of new CEO Anna Chokina in December 2021 and the departure of COO Eric Chang in April 2022, the company’s CFO Simon Walters is now the only board member to have been at the company longer than six months.
Ms Chokina told BusinessCann: “Both of our new NED appointments Gill Whitty-Collins and Misha Sher have a deep understanding of the global fast moving consumer goods sector and know what it takes to launch a new brand and make products successful.”
“Their appointment represents a strengthening of the FMCG talent on the Cellular Board and is part of a strategic drive to position Cellular for its next phase of growth.
“I am confident that as seasoned brand-builders, that have worked across some of the world’s top consumer goods companies, the strategic experience and insight they bring will complement our Board profile and add great value.”
Despite going public in February 2021, the company didn’t release its inaugural product range until December of that year.
This included a CBG skincare product line via its supply partnership with Willow Biosciences, launched in June 2021, and a range of CBD ingestibles via a separate supply partnership with Chanelle McCoy Health (CMH) announced in August 2021.
Though Cellular are yet to report any concrete sales figures, in February it released a statement warning that ‘total revenues had been below internal forecasts’, citing delays to its marketing drive which was subsequently launched in March.
On top of its initial poor sales performance, the company’s product range and potential revenues were effectively cut in half last month when Trading Standards requested they pull their ingestible range from sale, after the FSA ruled its products should not be added to the public list.
While the company says it will ‘continue to engage with the regulator’, no resolution is likely unless significant changes are made to current white-labelling regulations.
The development leaves Cellular Goods with little recourse other than to double down on its non-ingestible products and skincare range, which it says have been the focus of its marketing activity to date.
Ms Chokina added: “Ingestibles will continue to be part of our long-term strategy. In the short term and for 2022, the Company’s focus will remain on our Look Better skincare offering, where product marketing and advertising activity to date has been focused.
“Alongside skincare, ingestibles are an important part of the overall market, and we will continue with our mission to become the most innovative listed wellness company working to deliver best-in-class products and to educate consumers on the amazing potential of cannabinoids.”