Oxford Cannabinoid Technologies
THE pharmaceutical cannabis company has seen its shares drop around 25% this week, following weeks of the first significant growth in its share price for months.
It came as OCT published the first set of financial results under its newly appointed CEO Clarissa Sowemimo-Coker.
Days later, the company’s co-founder Gavin Sathianathan, who left the company in November 2021, divested a significant portion of his remaining stake in the company, compounding the drop in price.
Mr Sathianathan initially held an 8.14% stake in the company when it went public in early 2021, holding around 78m shares.
In November 2022, this was reduced by nearly half to 44.5m shares, representing a 4.65% of the total voting rights in the company
This week, the figure was almost halved again, seeing Mr Sathianathan reduce his holding to 24.5m shares, representing total voting rights of less than 3%.
In its interim results, OCT reported an operating loss of £4.54m during the six months to October 31, 2022, up from £2.3m in the same period a year earlier.
Research costs for the period came in at £3.1m, around £1.5m of which related to its lead compound, which is due to enter Phase 1 clinical trials imminently.
The group accrued R&D tax credit of £840k in the period, seeing the company report a total comprehensive loss of £3.7m.
As of October 31, 2022, cash reserves stood at £4.9m, and Ms Sowemimo-Coker informed investors during a recent presentation that this is still expected to cover the company’s costs up to 2024.
Asked about the company’s share performance to date, she added: “When we are looking at a fundraise, which will be some time in the future, certainly not until we have our Phase 1 results in hand… we’ll be looking very carefully at how to minimise dilution for shareholders and to make sure we are raising enough money to take the business forward but also being mindful of dilution.”
Akanda has responded to demands brought by its former director Louisa Mojela, who ran its recently closed Bophelo subsidiary in Lesotho and is demanding £1.8m in damages in an ‘unfair dismissal’ case.
The NASDAQ-listed cannabis company instead demanded that Ms Mojela pay the company £900k for failing to fulfil her duties, Law360 reported.
In November 2022, BusinessCann reported that Akanda had made the decision to ‘cease involvement in Bophelo’s Lesotho operations’, following an extended legal battle with its former Executive Chairman Ms Mojela, for which the company recorded $2.3m in losses.
Akanda has claimed that Ms Mojela put the company into liquidation as a ‘retaliation’ of her dismissal in June 2022, for which she is now suing the company.
In October, Ms Mojela launched legal action against Akanda, and its subsidiary Canmart, claiming that she was wrongfully fired after refusing to comply with an order to stop making transactions on behalf of Bophelo and sign over all accounts to Akanda’s CEO Tej Virk.
According to Akanda, Ms Mojela’s refusal to comply with ‘reasonable’ demands justified her termination, alongside her mismanagement of ‘significant’ investments into Bophelo’s Lesotho operations.
The defence went on to say that Bophelo’s management team received ‘excessive compensation for poor performance, had no overall business plan and had no success in key markets’.
“It (Bophelo) had made significant losses, lost focus and was not seeking ways to put the company on a viable path to profitability: shareholders’ investments were being eroded.”
Warsaw Stock Exchange-listed Cannabis Poland announced this week that it had secured zł10m (£1.86m) in new funding from an unnamed British investor.
On January 25, the company revealed that the investor had agreed to purchase 50m bearer shares in exchange for the funding.
Cannabis Poland, which currently sells CBD products via two online platforms, says that this ‘guaranteed capital’ will allow it to undertake its ‘extensive’ plans to capitalise on the Polish cannabis market as it continues to develop in 2023.
This includes the launch and distribution of high-THC medical cannabis oils and dried flower to the Polish medical cannabis pharmacy network ‘later this year’.
Despite Poland amending legislation in May 2022 to allow for the cultivation of medical cannabis for the first time, Cannabis Poland says patients are still largely reliant on foreign imports.
The company reportedly has in place ‘letters of intent to purchase medical marijuana with producers located in Western Europe and North and South America’ to supply the Polish market.
Cannabis Poland’s CEO Grzegorz Konrad believes that the market is set to see considerable consolidation over the coming year, a change his company plans to capitalise on.
“Regarding the prices of hemp products in Poland or worldwide, we do not expect them to decrease – both because the cheapest and worst products that do not have any health-promoting properties will start to disappear from the market and because of widespread inflation,” he said.
Mr Konrad added that while forecasting is made difficult by the ongoing war in Ukraine, he expects the Polish CBD market to continue to grow at pace and its own ‘CBD products to be available in an increasing number of shops and pharmacies’.
“It seems that there will be a change of ownership among manufacturers and distributors as well: unfortunately, some of them – especially the smallest ones – will go bankrupt and some will be taken over.
“We hope to contribute to the latter ourselves, as we have plans to consolidate the market and make capital investments in cannabis companies – possibly not only in Poland.”