BBS Pharmaceuticals, a South Australian medicinal cannabis company, has been placed into administration, leaving its investors facing an uncertain future.
The company held licences to cultivate and manufacture medicinal cannabis at a facility in regional South Australia, with ambitions to supply both domestic and international markets.
Administrators were appointed last Friday (January 27) following a string of delays and legal disputes that brought the project to a halt, according to The Advertiser.
Around 20 small investors and other shareholders are caught up in the collapse as administrators from Hall Chadwick work to determine whether any part of the business can be salvaged.
BBS, which previously operated under the name Vircura Pharmaceuticals, was founded in 2017 by Stuart Bais, Samuel Butler and Brandon Smith, who continues to serve as the company's sole director.
ASIC records indicate that Aaron Hickmann, founder and chief executive of technology firm VALO, became the majority shareholder of BBS in March 2022 and held a directorship until his resignation in October.
Hickmann, whose company Ikara Equities controls 86% of BBS, said in an interview he was unclear why administrators had been appointed but expressed hope that a buyer would emerge.
"When we departed in October last year, in terms of our involvement, BBS was in a strong position to present itself for sale to the market, both nationally and internationally," he said.
"There's considerable interest in this space for licensed companies so my only assumption is that the administrators have been appointed to help facilitate this process.
"I understand there are a number of shareholders that have invested prior to our involvement – all I'd say is any investment into a company can be perceived as risky.
"However, my understanding is the company is in a good position to go to market for sale and that's going to give all the current shareholders a positive return."
Back in 2020, BBS's then-chairman George Vanco had indicated the company was on course to begin production that same year after completing construction of a solar, wind and battery-powered growing facility.
The project subsequently stalled, and Vanco stepped down when Hickmann joined the company as a director.
Administrator David Trim told The Advertiser it was too soon to put a figure on the company's debts or outline the reasons behind its insolvency.
The administrator and former directors of BBS have been approached for further comment.
Last month, Hickmann announced plans to develop Monarto as a centre for hemp-based building material production in South Australia, and said the BBS collapse would have no bearing on his broader ambition to build a significant hemp manufacturing industry in the state.
