FSD Pharma is getting out of marijuana.
The Philadelphia-based biopharmaceutical company once had designs on becoming one of the planet’s biggest cannabis producers. Early last year, it announced it was refurbishing a 600,000-square-foot warehouse in Ontario, Canada, to become the largest indoor cannabis cultivation facility in the world. It intended to serve not only the nascent Canadian market but Europe, as well.
The company’s cannabis aspirations were neatly summed up in its stock ticker symbol: HUGE.
On Thursday, CEO Raza Bokhari said FSD was pulling out of the marijuana trade altogether.
“We are officially out of the cannabis business,” said the physician-turned-entrepreneur, citing a “supply glut” of marijuana in Canada, and the recognition that other marijuana companies were “doing a much better job.”
Bokhari said the company was sitting on $2 million worth of cannabis that it couldn’t sell. “We were just not able to find a buyer.”
FSD announced that it will forfeit the marijuana cultivation licenses back to the Canadian government. The licenses currently are held by a wholly owned FSD subsidiary.
The company plans to sell its production facility in Cobourg, Ontario, a former Kraft foods plant about 80 minutes east of Toronto. Bokhari said FSD bought the buildings for about $4 million in U.S. dollars. Since they have been outfitted to grow marijuana, Bokhari believes the facility will fetch about $15 million in U.S. dollars. “Maybe Amazon can buy it,” he said.
FV Pharma will shut down operations within 30 days, but at least 10 employees will remain at work for FSD in Ontario, he said. The company will remain listed on the Canadian Stock Exchange.
Bokhari said FSD now will double down on pharmaceutical research and development.
“As CEO, you should always recognize your job is to increase shareholder value,” Bokhari said. “And the best bang for your money right now is in R&D.”
FSD has high hopes for a synthetic anti-inflammatory drug that it has in development.
The drug, known as micro PEA, is sold in Italy by Epitech as a prescription nutraceutical, or medicinal food, dispensed to treat chronic inflammation.