Some marijuana users claim that it makes them feel numb. However, the UK’s newest cannabis companies, it is having the opposite effect.
Three companies have seen extraordinary boardroom disputes: Chill Brands, Love Hemp and Oxford Cannabinoid Technologies.
Investors have suffered bruisingly from the bust-ups that were accompanied by a plunge in share prices.
“Pot stocks” – shares that are owned by companies seeking legal profits from drug use – were quickly added to the London Stock Exchange’s list when it relaxed its rules early in 2021.
As celebrities like David Beckham and Snoop Dogg supported the companies, the hype surrounding this industry grew even more. However, several companies have been the victims of weed wars and there has been a huge downturn.
Love Hemp’s board, which has boxer Anthony Joshua as its ambassador is embroiled in a dispute over Philip Small, its former boss.
It issued an extraordinary response last week to claims made by Small online, which were thought to be focused on the company’s finances. Love Hemp claims he caused significant disruption to the group and that it had to settle a harassment claim with an ex-employee because of his ‘inappropriate behaviour’.
According to the firm, the reason for the resignation of the previous board was not valid due to his “previous tax affairs”. Small called the comments ‘unfounded.
This is another embarrassment to Love Hemp’s shares, which have been suspended from May since the resignation of its corporate advisors.
Aquis, a London-based challenger stock exchange, issued a separate fine of £70,000 to the firm for violating rules, including misleading information.
The emerging industry has seen love and peace move from student rooms to the stock exchange. It is illegal to possess the drug for recreational purposes in the UK because it is classified as a Class B substance.
The legalization of medicinal cannabis in 2018 saw a boom in London’s market for pot stocks. Cannabidiol (the non-psychoactive extract from cannabis) were first regulated in 2012 after its popularity exploded. Aquis lists many firms.
After Canada legalized cannabis for recreational and medicinal use, North America has seen the popularity of cannabis shares. Several states have relaxed their laws.
Products such as CBD oils, chewable gums, and face creams have seen a surge in sales. Many users claim that they help them relax.
However, investors quickly lost any positive effects. Clem Chambers, an investment expert, said that cannabis stocks were big in the US and it was popular in the UK. They plummeted in the US, and the UK was certain to follow. Love Hemp’s share slump was mirrored by several major UK cannabis companies, including Cellular Goods which is supported by David Beckham. Kanabo, MGC Pharmaceuticals Chill Brands, and Oxford Cannabinoid Technologies are just a few of the others that have been brought to an end. They have collectively lost £89 million of value.
Chill Brands is the new name of what was once an oil and gas company in Colorado. It has been marred by a dispute with a former executive. In a US court, the firm filed legal action against Michael Sandore, former chief commercial officer. The lawsuit claims that Sandore made several ‘disappointing’ comments about the group and claimed to be higher in the management hierarchy than he was – claims that he denies. Boss Callum Sommerton stated that he hopes to reach an out-of-court settlement soon.
Chill Brands also has had to raise new cash from investors many times. In a fundraising campaign last year, Dame Ann Gloag (co-founder of Stagecoach) became a backer.
Oxford Cannabinoid Technologies is also backed by Snoop Dogg, but harmony was not easy to find. Gavin Sathianathan, the co-founder of Oxford Cannabinoid Technologies, failed to remove several board members due to what he called an ‘ongoing and worsening loss of value’.
It was valued at £48 million when Oxford Cannabinoid Technologies listed it in May 2021. It now has a value of £7.5 million.
Sommerton claims that disputes are more common in the new industry. Sommerton says that companies are finding their footing in a market which opened in 2018 and is constantly changing.
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