Chill Brands CEO Suspended Amid Allegations Of ‘Use of Inside Information’, SynBiotic Buys Croatian CBD Maker, & Hellenic Secures Funding

Chill Brands 

Chill Brands has seen its share price dive by nearly 40% this week after news emerged that its CEO, Callum Sommerton, had been suspended amid allegations of insider trading.

The shock announcement came just days after the company’s largest investor sent a requisition letter to request a general meeting be called so shareholders could vote on the ousting of two directors.

On Monday (April 22), Chill Brands published an RNS stating that it had now hired law firm Fieldfisher to conduct an independent investigation into allegations surrounding the ‘use of inside information’.

As such, Mr Sommerton, who has helmed the CBD and vaping company since 2022, has been ‘suspended in connection with these allegations’ while the investigation is conducted.

The statement makes it clear that ‘the suspension does not constitute disciplinary action’ and ‘does not imply any assumption’ of misconduct.

STATEMENT

I am surprised and disappointed by the allegations made against me, which I believe are without merit. I am confident that I will be vindicated. I will avoid further comment at this time to allow the process to progress.

— Callum Sommerton (@callumsomm) April 22, 2024

Mr Sommerton took to X to address the allegations, stating: “I am surprised and disappointed by the allegations made against me, which I believe are without merit. I am confident that I will be vindicated. I will avoid further comment at this time to allow the process to progress.”

The nature of the allegations, who levelled them, and whether they are connected to last week’s requisition request are currently unclear.

If the requisition request, levelled by Jonathan Mark Swann, who owns 12.58% of the company’s total voting rights, was made legally, the company has 28 days to call a general meeting.

During this meeting, shareholders will vote on whether to oust two American directors, Antonio Russo and Trevor Taylor ‘with immediate effect’, and replace them with two relative unknowns.

The pair have held various senior roles at the company and were co-CEO’s during one of Chill Brands’ most turbulent periods.

SynBiotic

German cannabis group SynBiotic has purchased its second company in four months, adding Croatian cannabinoid extracts and isolates manufacturer Ilesol Pharmaceuticals to its roster.

While SynBiotic has a number of CBD brands already included in its portfolio, this acquisition will provide it with an ‘independent production facility for refining extracts and manufacturing isolates’ for the first time.

Ilesol has its own 3,400sq m production facility in Varaždin, Croatia, and specialises in producing CBD, cosmetic products and dietary supplements.

This facility will enable SynBiotic to ‘produce CBD isolates with the made in EU label’ and distribute them through its already established supply chains.

“We are thus integrating another crucial process step into our supply chain,” said Daniel Kruse, Managing Director of SynBiotic.

“The in-house production and refinement of hemp and cannabis extracts and corresponding isolates is an enormous competitive advantage. The market for hemp extracts and CBD isolates alone is a growth market worth billions. The cosmetics industry has long since discovered hemp and CBD for itself and demand is increasing significantly.”

By leveraging its subsidiaries Solidmind and Hempro, the group also suggests Ilesol’s cosmetic range will ‘fit perfectly into (its) distribution programme’.

It comes after SynBiotic’s acquisition of Austrian firm Bushdoctor in January, which not only provided the company with a foothold in a new market, but positioned it to capitalise on the expected boom in home cultivation following the recent cannabis reforms in Germany.

Ilesol adds another market to SynBiotic’s network, in what Mr Kruse called a ‘logical step towards a strong market position throughout Europe’.

Hellenic Dynamics

The Greek medical cannabis cultivator has also seen an uptick of around 30% this week after securing €1m in new funding.

On Monday (April 22), Hellenic said that its subsidiary Hellenic Dynamics SA has entered into a 15-year secured loan agreement with a ‘European investment and consulting house’.

The loan has an interest rate of 3.5% and Hellenic will only repay interest for the first six months.

It says the funds will be used to ‘complete the current phase of investment at the Hellenic facility’ including an expansion of its cultivation capacity and R&D testing of strains.

Dr Fillipos Papadopoulos, Executive Director of Hellenic Dynamics, said: “By securing the loan agreement, Hellenic Dynamics SA will significantly reduce the median cost of financing for the company in its growth stage.

“The commitment to a 15-year loan underpins the approach that the company is taking to deliver high quality cannabis products into global markets. We are also in advanced discussions on additional financing with a number of parties for expedited growth, and further announcements will be released to the market in due course.”

It came days after Hellenic announced that Riverfort Securities Ltd will subscribe to buy shares to repay part of a loan and interest from an earlier mezzanine loan. The amount owed, £39,287.67, will be paid with 1,833,850 new shares at 2.14 pence each.

These new shares were submitted to the London Stock Exchange on April 17, 2024.