This week in the marijuana space, a dispute boiled up between a group of disgruntled investors and a public cannabis investment operator.
In the US, a major cannabis legalization vote was scheduled in Congress for later this month.
Keep reading to find out more cannabis highlights from this week.
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Investor group raises question at cannabis company
A group of Australis Capital (CSE:AUSA,OTC Pink:AUSAF) investors issued a statement on Monday (August 31) asking for a shareholder meeting to elect new directors to the board. The investors are arguing that the company is willingly delaying the election of new board leadership.
“As demonstrated by the Company’s poor share price performance since inception, it is clear that an immediate change in leadership is required to protect shareholder value,” the group said.
Australis is an offshoot launched by Aurora Cannabis (NYSE:ACB,TSX:ACB) as a way to pursue investments in the cannabis space.
The investor group includes: Terry Booth, Lola Ventures, Roger Sykes, 1703469 Alberta, Duke Fu, Green Therapeutics and Jason Dyck.
According to these investors, since Australis’ acquisition plan for Passport Technology failed at the start of August, the company has been unclear and has failed to communicate with shareholders.
“The Board has categorically failed in its duty to provide oversight and to effectively communicate with shareholders,” the investor group said. At the end of August, Australis indicated it would hold its annual general and special meeting of shareholders on November 17.
This past Thursday (September 3), Australis confirmed its has signed a settlement agreement regarding its missed acquisition. Additionally, Executive Chairman Scott Dowty left the company.
As part of his departure, Dowty elected to let go of his cash severance and his remaining unvested stock options. However, he will still keep his restricted share units, and the company will issue just over 4 million shares to Dowty.
“This settlement represents a fair and reasonable resolution between AUSA and Passport, and an equitable separation between the Company and Scott,” said CEO Cleve Tzung.
This isn’t the only big shakeup for Australis recently — earlier this year, the company confirmed the departure of its CFO, Michael Carlotti.
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Historic cannabis vote set to take place
This past week, a much-anticipated vote on American cannabis legalization was scheduled to take place in Congress on September 21.
House Majority Leader Steny Hoyer told Cannabis Wire that the vote for the MORE Act will act as a way to decriminalize marijuana at the federal level. “This legislation is an important step to correct the disproportionate impact our criminal justice system has had on communities of color,” said Hoyer.
While the vote may prove to be historic, it could also end up being more symbolic. That’s because obtaining approval would put it up against the Republican-controlled Senate, and there’s little indication the legislation would make it through that obstacle.
In addition to taking cannabis away from the Controlled Substances Act, the MORE Act would make it so expungements become available to those with previous federal cannabis records.
Cannabis company news
- Curaleaf Holdings (CSE:CURA,OTCQX:CURLF) celebrated US$1 million in sales for its Select Elite Live cartridges in the Florida market. The feat was accomplished less than a month after the product was launched in the state.
- Zenabis Global (TSX:ZENA) told investors it has confirmed its first shipment of cannabis product to an undisclosed Australian distributor. The company expects to import 100 kilograms into Australia during the third quarter.
- Canopy Growth (NYSE:CGC,TSX:WEED) confirmed to Marijuana Business Daily that it has let go of more of the workforce at its Niagara, Ontario, facility. The company did not indicate how many staffers have been let go, but said it will show its new headcount in its next financial results report.
- Halo Labs (NEO:HALO,OTCQX:AGEEF) and High Tide (CSE:HITI,OTCQB:HITIF) amended their deal for the sale of High Tide’s KushBar retail cannabis assets to Halo. Halo will pay C$5.7 in total through cash, shares and special notes for the three active stores.
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Securities Disclosure: I, Bryan Mc Govern, hold no direct investment interest in any company mentioned in this article.
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