Why the AusCann (ASX:AC8) share price jumped 14% higher today

The AusCann Group Holdings Ltd (ASX:AC8) share price is on the move on Friday after announcing the appointment of its new CEO…

| More on:
asx share price represented by green cannabis leaf sitting atop red maple leaves

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The AusCann Group Holdings Ltd (ASX: AC8) share price is on the move on Friday after the release of an announcement.

In morning trade the medicinal cannabis company's shares are up 14% to 24 cents.

What did AusCann announce?

This morning AusCann announced that it will be changing its Chief Executive Officer upon the completion of the acquisition of CannPal Animal Therapeutics Limited (ASX: CP1).

According to the release, the Founder and Managing Director of CannPal, Layton Mills, will lead the combined company. This decision was reached following a combined meeting of the Boards of CannPal and AusCann and will take effect from the completion of the transaction.

AusCann's current CEO, Nick Woolf, has decided to tender his resignation, but has agreed to stay with AusCann as Interim CEO until the transaction completes. After which, he will stay on in an advisory capacity to assist with an orderly transition until 30 June 2021.

Mr Woolf was only appointed CEO of AusCann in August of last year.

AusCann's Chairman, Max Johnston, commented: "Since Nick joined us in August 2020 he has been instrumental in moving forward the development of a robust pipeline with advancement of studies of the existing hard-shell capsules based on the Neuvis platform, initiating formulation work of a novel CBD only variant and engaging an experienced US-based team to develop additional product candidates addressing unmet health needs."

"In addition to this, Nick has also taken significant steps toward making AusCann more cost effective and efficient in utilisation of its assets and operations. We thank him for all his efforts in taking AusCann forward during his tenure whilst also progressing the proposed acquisition of CannPal. I am pleased that Nick has agreed to provide continuity during the prospective transition and wish him well in his future endeavours," he added.

The outgoing CEO, Mr Woolf, commented: "The combination of AusCann and CannPal has clear synergies including multiple revenue streams and the leverage of data in the animal health space for the development of human medicines and vice versa. Both companies have established a strong network of alliances that should accelerate success."

"I believe that the medicinal cannabis industry in Australia has significant growth potential and the combined company will be well placed to benefit from this," he concluded.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Share Market News

Modern accountant woman in a light business suit in modern green office with documents and laptop.
Opinions

1 overlooked ASX growth stock I'm chasing for multibagger potential

I believe this stock can create strong returns in the years ahead.

Read more »

A man sits in deep thought with a pen held to his lips as he ponders his computer screen with a laptop open next to him on his desk in a home office environment.
Broker Notes

Top brokers name 3 ASX shares to buy next week

Brokers gave buy ratings to these ASX shares last week. Why are they bullish?

Read more »

Cheerful Father And Son Competing In Video Games At Home
Share Market News

Here's how the ASX 200 market sectors stacked up last week

ASX consumer discretionary shares rose by more than 3% last week.

Read more »

happy investor, share price rise, increase, up
Broker Notes

These ASX 200 shares could rise 15% to 50%

Analysts think these shares can rise strongly from where they trade today.

Read more »

a man peers through a broken brick wall to see grey clouds gathering beyond it
Share Market News

Why this smashed ASX 200 share is a fundie's top value pick

It's an ASX consumer discretionary stock that has lost 40% of its value over the past year.

Read more »

a man sits back from his laptop computer with both hands behind his head feeling happy to see the Brambles share price moving significantly higher today
Opinions

How I plan to invest my tax cuts

I have big plans for my tax cut cash this year.

Read more »

Red percentage sign on blocks on top of each other, symbolising interest rates.
Share Market News

Here's when Westpac says the RBA will cut interest rates

Will interest rates be going lower any time soon?

Read more »

a man's hand places a white egg into a basket of similar white eggs.
Opinions

With its 8% yield, I think this undervalued ASX 200 stock is an opportunity not to miss

The value and passive income of this stock looks very eggciting to me.

Read more »