South Australian medicinal cannabis firm BBS Pharmaceuticals has gone into administration, leaving investors in limbo.
BBS was licensed to cultivate and manufacture medicinal cannabis at its facility in regional South Australia, with plans to sell domestically and overseas.
However, administrators were appointed last Friday (January 27) after a series of delays and legal battles stalled the project, according to The Advertiser.
The collapse impacts around 20 small investors and other shareholders as administrators from Hall Chadwick try to establish whether parts of the business can be saved.
BBS, formerly called Vircura Pharmaceuticals, was established in 2017 by Stuart Bais, Samuel Butler and Brandon Smith, who remains the company’s sole director.
ASIC records show Aaron Hickmann, founder and chief executive of technology firm VALO, took over as majority shareholder of BBS in March 2022 and was a director of the company until his resignation in October.
Hickmann, who owns 86% of BBS through his company Ikara Equities, told The Advertiser he was unsure why administrators had been appointed, but hoped a buyer could be found.
“When we departed in October last year, in terms of our involvement, BBS was in a strong position to present itself for sale to the market, both nationally and internationally,” he said.
“There’s considerable interest in this space for licensed companies so my only assumption is that the administrators have been appointed to help facilitate this process.
“I understand there are a number of shareholders that have invested prior to our involvement – all I’d say is any investment into a company can be perceived as risky.
“However, my understanding is the company is in a good position to go to market for sale and that’s going to give all the current shareholders a positive return.”
In 2020, BBS’s then-chairman George Vanco said the company was on track to begin production later that year following construction of a solar, wind and battery-powered growing facility.
However, the project stalled and Vanco resigned when Hickmann was appointed as a director.
Administrator David Trim told The Advertiser it was too early to provide an estimate of the company’s debts or explain why it faced insolvency.
Cannabiz has approached the administrator and former directors of BBS for further comment.
Last month, Hickmann unveiled plans to establish Monarto as a hub for the production of hemp-based building materials in South Australia. He said the BBS collapse would not impact his vision to build a major hemp manufacturing industry in the state.
