Former White House Press Spokesperson Takes Charge of Akanda As Revenue Kicks In But Doubt Emerges About Its Future in Portugal
Akanda says it has achieved its ‘first significant revenue that is above our initial projections’ after successfully launching its initial supply to German customers. It ascribes this to the success of its Portuguese subsidiary Holigen, but at the same time hinted that it might dispose of the asset as it reconsiders its strategic options.
George W Bush Jr’s former spokesperson, Katie Fields, is now at the helm of Akanda, pending an investigation into former CEO Tej Virk who’s still on paid leave.
The Nasdaq-listed medical cannabis company is starting to benefit from Virk’s German deal, announcing revenue of 1,8 million Euros in the last quarter of 2022 from its supply contract with Cannsativa, Germany’s principle pharmaceutical cannabis distributor.
Field is chairperson of Halo Collective, Akanda's, main shareholder and was appointed to the Akanda board 2022 . She served briefly as US presidential press spokesperson in 2003 before becoming one of the American cannabis industry’s most high profile woman executives over the past 12 years.
Akanda’s decision to ditch Africa in favour of growing indoor medical cannabis in Europe appears to be paying off. It earned its "first signifgicant revenue" in the last quarter of 2022 by supplying Germany from its Portuguese facility in Sintra, and its share price has picked up, jumping 80% in the first week of February 2023.
The company has written off its investment in its Lesotho subsidiary, Bophelo Bioscience and Wellness after it was controversially put into liquidation by former Akanda chairperson Louisa Mojela.
However, Akanda is sending out mixed messages over the future of its wholly-owned Portuguese subsidiary, Holigen. On the one hand it put out a statement on 3 February 2023 committing itself to expanding the Sintra facility. On the other hand it’s new chairperson, Harvinder Singh was reported in BusinessCann that the company was ‘assessing strategic alternatives’, including ‘selling our Portuguese business’, a move which would mark the latest major divestment from the region after Clever Leaves and Tilray announced similar moves last month.
Right now, Akanda has no alternative source of supply, other than Holgin, for the lucrative German market, having exited from Lesotho after a nasty corporate battle with former chairperson Louisa Mojela. In fact the company’s latest statement is unambigious about its commitment to Holigen in that it has stock on hand and plans to increase capacity:
“The Company has over 800 kg of freshly cultivated cannabis ready for pending medical sales expected in Q2 and Q3.
“In addition, as demand for medical cannabis in the EU increases, the Company plans to expand its overall indoor EUGMP cultivation capacity at its Holigen facility by increasing the number of grow rooms in its facility in Sintra, near Lisbon, Portugal. Holigen has been successfully operating a 20,000-square-foot facility, and the expansion plan is expected to allow the facility to perform at an increased capacity.”
The company says its revenues “increased as a result of cannabis sales produced by Holigen, which implements sophisticated processes to avoid weakening terpenes and product potency. Akanda’s premium cannabis products have tested at 29.2% THC and are the highest THC percentage products to be released and sold in the German medical cannabis market. The Company has received many positive reviews on German WeedMaps for its premium T24 and T27 cannabis products, which have been sold under third-party brand names”.
The following is an extract from Akanda’s 3 February 2023 media release:
According to the preliminary, unaudited financials from Q4 2022, the Company has recognized gross revenues of EUR 1,803,996M with EBITDA of €472K and an EBITDA margin of 16.5% on only two months of sales and three months of fixed costs.
The Company expects that these sales volumes will increase throughout 2023 based on the following:
• Initial sales exceeding the Company’s original internal projections,
• Current existing inventory on hand,
• Planned increases in cultivation production, and
• Expansion into the UK market.
Furthermore, the Company’s German distribution partner recently launched its new Pharmacy Partnership Program2, designed to improve and support visibility and expertise to expand in the German medical cannabis market. The distributor offers a comprehensive product range in which Holigen-supplied high-quality medical-grade cannabis is made available.
“The management team is thrilled to recognize our first significant revenue that is above our initial projections as we continue to see the German cannabis market expand. With highly profitable sales of our high-THC, untreated medical cannabis in Germany, we are assessing strategic alternatives, including increasing our capacity, expanding our licensing deal with Cookies, and selling our Portuguese business.
The Holigen operations are strategically positioned to produce on a large-scale, high-quality indoor cannabis, some of the finest in Germany, in preparation for sales expansion with the German and UK markets,” states Harvinder Singh, Chairman at Akanda Corp. “Our vision is to be a pioneer in the European cannabis markets, utilizing our valuable global expertise in cutting-edge cannabis cultivation processes.”
About Katie Field: corporate lowdown on the Halo chairperson and acting Akanda CEO
Field has nearly a decade of direct cannabis experience spanning all facets of the business, including strategy, retail, corporate development, business development, HR & organization, legal & regulatory, and investor relations. She has been a key member of the Halo executive team since joining the Company in April 2019, serving initially as Chief Strategy Officer, President since February 2020, and Board member since July 2021. Ms. Field first entered the cannabis industry in 2014 at Costa Farms, where she led the procurement, build-out, and sale of one of five original vertically integrated companies in Florida; subsequently operated a strategy consulting practice focused on cannabis and also worked at MariMed as EVP of Corporate Development. Her resume includes positions at The Brookings Institution and Bain & Company. She holds an MBA from Columbia Business School and a BA with honors from Stanford University.