NEWS BRIEF

FSD Pharma to surrender cannabis licenses, sell off marijuana assets

Canadian holding company FSD Pharma said it’s exiting the marijuana business and relinquishing Health Canada cannabis licenses held by subsidiary FV Pharma.

FSD Pharma CEO Raza Bokhari said the decision was made to maximize shareholder value as the company focuses on:

  • Research and development of a compound described as an anti-inflammatory agent for treating hospitalized COVID-19 patients.
  • Exploring “the acquisition of other compelling compounds to expand our drug development pipeline.”

FV Pharma’s assets will be liquidated, including the company’s cannabis production facility in Cobourg, Ontario.

The company held federal licenses to grow and process cannabis in a 25,000-square-foot area inside a former Kraft Foods plant as well as a license to sell medical marijuana.

FV Pharma’s inventory, property, plant and equipment were worth 12.3 million Canadian dollars ($9.2 million) as of March 31, according to a May regulatory filing.

The company started selling medical cannabis in August 2019 but did not sell into the adult-use market, according to the filing.

In March, FSD Pharma said it was scaling back cultivation at that facility and putting some workers on furlough as a result of the COVID-19 pandemic.

Auxly Cannabis Group terminated a joint venture with FV Pharma in February 2019, citing contractual breaches by FSD Pharma and “significant concerns” about the cultivation facility itself.

FSD Pharma trades on the Canadian Securities Exchange as HUGE.

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