EXCLUSIVE: NASDAQ-Listed Enveric To Split Into Two Companies, One For Cannabinoids, One For Psychedelics

Enveric Biosciences ENVB, a biotech company working with cannabinoids and psychedelics, announced it will spin off its cannabinoid pipeline into a separate public company that will also be listed on the NASDAQ, and will be called Acanna Therapeutics Inc.

CEO Dr. Joseph Tucker said the decision came after a comprehensive review of potential strategic options to unlock value and that it is considered in the best interest of shareholders.

“Each respective public company will focus all its resources on the research and development of their programs, and in our opinion, receive greater value from the market,” Tucker said.

What Will Happen To Enveric’s Shareholders?

Enveric stated that it plans to dividend 100% equity ownership interest of the new company to existing Enveric shareholders.

Immediately following the spin-off, Enveric will distribute to each shareholder an undisclosed number of common shares of the newly public company for each share of Enveric common stock owned.

The new company, referred to for now as “the cannabinoid asset portfolio,” will become a wholly-owned subsidiary of Enveric and will be listed on the NASDAQ. 

Acanna has raised $1 million in a Series A round and could raise an addittional $4 million, subject to completing the spin-off.

Why Is Enveric Splitting In Two?

As the first psychedelics companies went public in 2020, diversification was seen as a bullet-proof method for minimizing risk. 

Whether through a diversified pipeline of different molecules or a business model working with several revenue streams, many companies took to this strategy to appeal to investors at-large, adding an extra layer of safety to inherently high-risk operations.

However, the diversified model appears to be adding excessive weight to psychedelics companies as they try to navigate a hostile market, where access to institutional capital is limited and stock prices remain low.

In an effort to attract more interest from an already disillusioned biotech market, companies are trying out new strategies that include becoming laser-focused on more specific sub-sectors.

Less than two weeks ago, NASDAQ-listed psychedelics company Field Trip FTRP made a very similar announcement. The company plans to split its research and care-delivery operations into two separate publicly-listed companies.

“In these challenging markets, the board and management team have spent considerable time evaluating the best way to return value to all of our stakeholders – patients, shareholders, and employees,” Tucker said. “For Enveric and our proposed Nasdaq-listed wholly-owned subsidiary, this provides us with an opportunity to commit 100% of our team’s efforts and capabilities towards the development of their respective next-generation therapies.” 

Initially focused on cannabinoid medicine, Enveric entered the psychedelics space with the acquisition of MagicMed Industries in May 2021. The merger brought Tucker on board as CEO and gave the company drug development and early-discovery capabilities.

The new Enveric will now be solely focused on mental health, said Tucker, adding that “there are large unmet medical needs in both portfolios, so we look forward to moving them through the clinical pathway.”

Picture by Bannon Morrissy on Unsplash.

Market News and Data brought to you by Benzinga APIs
Comments
Loading...
Posted In: BiotechCannabisNewsPenny StocksPsychedelicsEntrepreneurshipExclusivesMarketsGeneralDr. Joseph Tucker
Benzinga simplifies the market for smarter investing

Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.

Join Now: Free!

The Top Cannabis Event In New Jersey

Join the Benzinga Cannabis Market Spotlight in New Jersey on June 17th! Grow your business, raise money and capitalize on the booming NJ recreational market. Don’t miss this must-attend event in New Brunswick. Secure your tickets now. Very few spots are left. Use the code "JAVIER20" for 20% off!


Loading...