NZX-listed medicinal cannabis company Cannasouth (CBD) has entered voluntary administration, with the regulator suspending trading in its shares.
Earlier this week, the company requested a trading halt after a dispute arose with secured convertible noteholders that NZ RegCo warned could jeopardise a critical capital raise. The regulator noted that "CBD has an urgent need to secure funding to remain solvent."
A further extension was approved this morning to give funding discussions more time, but by this afternoon the company had appointed administrators from Blacklock Rose.
The appointment was made "in consultation with the noteholders who, at the invitation of the board, nominated the administrators", Cannasouth told the NZX.
The company added: "The administrators will be undertaking a detailed review of the operations of Cannasouth with particular focus on identifying the profitable lines of the company's products and services.
"When that has been completed the administrators will be seeking financial support from shareholders and noteholders to implement that plan.
"It is expected that the review… will take some time to complete as the parent company and its principle trading subsidiary companies are scrutinised.
"In the meantime, Cannasouth continues to support its customers with quality products that meet the strict regulatory requirements that apply to the production and supply of medicinal cannabis."
Shortly after this announcement, Cannasouth disclosed that CFO and company secretary Colin Foster had resigned, with his departure effective from yesterday (March 27).
CEO Mark Lucas said: "Colin was Cannasouth's first full-time CFO. He joined me as we embarked on our journey to build the first listed medicinal company in New Zealand. On behalf of your colleagues at Cannasouth, we thank you for your contributions."