FSD Pharma Inc (CSE: HUGE) announced today in a surprise move that the Board of Directors has decided to make some drastic changes to its leadership and operational structure.
Most significantly, the company has let go former CEO Rupert Haynes, with Dr. Raza Bokhari being appointed to the position of interim CEO. Additionally, FSD Pharma will be terminating their existing agreement with Auxly Cannabis Group (CVE: XLY) as it begins experimenting with growing cannabinoids (CBD) out of algae.
“We are taking these momentous steps to unlock shareholders value and re-energize execution of our company’s vision,” said new Interim CEO Dr. Raza Bokhari FSD Pharma. “The Board believes the Company has unique and invaluable assets and is taking appropriate actions that will support long-term positive cash flow and shareholder value.”
The company as a whole has been pivoting most of its business into the biotech scene, as management continues to believe that medicinal biotech will be one of the most lucrative aspects of the cannabis industry. Earlier today, FSD Pharma also announced that they had signed a letter of intent with Solarvest in order to grow pharmaceutical grade cannabinoids out of algae. Such a development could radically change current CBD production methods, as well as reducing the space, time, and costs required for these businesses.
While some investors might be aware that algae can be used as a renewable energy source, consuming CO2 and emitting hydrogen and oxygen, it’s chloroplasts can also produce bioactive proteins. As such, scientists have been experimenting with the prospect of genetically-engineered CBD producing algae as an alternative to conventional methods of production.
Additionally, FSD Pharma also intends to take the necessary steps in applying to the NYSE this year. Shares of FSD Pharma saw a 900 percent increase in value between June and September of 2018, before petering out over the last quarter like most other cannabis companies. However, the stock is still up 340 percent from when it first listed on the markets.
In response to the news, FSD Pharma shares plunged around 4.3 percent today, while shares of Auxly Cannabis dropped around 2 percent. The cannabis market as a whole saw declines as aftereffects of Aphria declined a hostile takeover bid from Green Growth Brands.
FSD Pharma Company Profile
FSD Pharma is focused on the development of the highest quality indoor grown, pharmaceutical grade cannabis and on the research and development of novel cannabinoid-based treatments for several central nervous system disorders, including chronic pain, fibromyalgia and irritable bowel syndrome. The Company has 25,000 square feet available for production at its Ontario facility with an additional 220,000 square feet currently in development (with an estimated cost of $250 per square foot to be completed in 2019). – FSD Pharma
Auxly Cannabis Group Company Profile
Auxly is a vertically integrated cannabis company with diverse international operations. Born from the intent of providing financing solutions to cannabis licence applicants, the company has since evolved into a platform spanning the entire cannabis value chain. This model, adapted for the cannabis space, allows for substantive control over its operations through increased operational flexibility, economic resiliency and improved product margin dynamics in an effort to create long term shareholder value. –Auxly