(This story was updated at 3:35 p.m. ET to include analyst comments and more details.)
Abner Kurtin, co-founder of Ascend Wellness Holdings (AWH), will move from his role as chief executive officer to executive chair of the board, the New York-headquartered cannabis multistate operator announced Wednesday.
The announcement comes nearly three weeks after Kurtin was arrested in Florida, where he lives, and charged with battery against his girlfriend.
Chief Financial Officer Daniel Neville and President and co-founder Frank Perullo will fill the role as co-CEOs on an interim basis, effective immediately.
Ascend’s board has retained the executive search firm Russell Reynolds to assist in finding a new CEO to lead the company, according to a news release.
“AWH has an incredibly strong foundation in place and remains well positioned to advance the goal of breaking down traditional walls in the cannabis marketplace and redefining the industry from the ground up,” the board said in a statement.
“As the company prepares to enter the next phase of its growth story, the board determined that now was the right time to initiate this transition.”
Ascend did not respond to a request for comment from MJBizDaily.
Kurtin’s court hearing is scheduled for Sept. 30.
Little change expected
Avis Bulbulyan, the CEO of Los Angeles-based Siva Enterprises, noted that as executive board chair, Kurtin remains at the top position in the company.
Bulbulyan speculated that not much would change internally at Ascend.
“When it’s all said and done, it doesn’t appear that Kurtin is going to give up his control over the direction of the company and isn’t going anywhere,” Bulbulyan told MJBizDaily via email.
“It doesn’t seem like the board is in a position to push back too much on that, so this does seem like a good presentation of changes being made and not creating a situation that’s permanent.”
Critics will likely be appeased that the company is taking action, Bulbulyan added, but in a way that leaves room for different possibilities.
“Now, the ball is in the hands of the communication team and what they can do with it,” Bulbulyan said.
“Having said all that, I think it’s smart and appropriate for the situation.”
Sara Gullickson, founder and CEO of The Cannabis Business Advisors in Phoenix, also approved of the leadership changes.
“By taking these steps ahead of court proceedings and not waiting, Ascend is instilling confidence in shareholders and its ability to move swiftly and thoughtfully with leadership changes,” she told MJBizDaily via email.
According to the arrest affidavit from earlier this month, a witness observed a vehicle exiting a Miami Beach gas station and then saw “a physical altercation ensue inside the vehicle” involving a man and a woman.
The man was later identified as Kurtin, 55.
Kurtin was charged with battery, a misdemeanor, and released after a $1,500 bond was paid.
His attorney, Howard Srebnick, was not available to comment on the upcoming hearing.
Srebnick, a partner at Miami-based Black, Srebnick, Kornspan and Stumpf, previously defended pop star Justin Bieber as well as Indy 500 winner Helio Castroneves, according to the firm’s website.
Ascend Wellness trades as AAWH on over-the-counter markets.
After the company’s shares initially dipped Wednesday morning, they were later trading at $1.84. That’s a jump of more than 7% from Tuesday’s close.
The company also trades as AAWH.U on the Canadian Securities Exchange and was trading at $1.85 on Wednesday afternoon.
Kate Robertson can be reached at firstname.lastname@example.org.