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News & Trends - Pharmaceuticals

Market challenges force Australian medicinal cannabis company into substantial operational changes

Health Industry Hub | April 4, 2024 |

Pharma News: In response to ongoing challenges in the medicinal cannabis sector, an Australian-founded company with global operations, has initiated a strategic restructuring plan aimed at enhancing operational efficiency and financial performance. Althea Group announced significant staff redundancies as the first phase of this restructure, resulting in a $1.5 million reduction in its cost base.

The company which operates across Europe, North America, Africa, and Australia, has been navigating a complex landscape alongside other major players in the industry. Recent financial reports from Althea and Cann Group highlighted substantial losses for the December half, raising concerns and prompting decisive action from both companies.

Following an extensive organisational review, Althea identified opportunities to streamline administrative, operational, and supply chain expenditures. While specific details of the review were initially limited, the company has now disclosed the completion of phase one of its cost-reduction program, primarily focusing on staff restructuring.

Joshua Fegan, CEO of Althea Group, said “As we continue to adapt to dynamic market conditions and execute on our strategic initiatives, we remain confident in our ability to strengthen our financial position and deliver sustainable value to our valued shareholders.”

In addition to staff reductions, Althea is actively pursuing further initiatives to trim overhead expenses and optimise its supply chain to bolster cashflow management. This includes renegotiating leases, optimising IT expenditures, and improving cost pricing and payment terms within its supply chain.

Althea Group operates in both the medical and recreational cannabis sectors, producing a range of cannabis-based medicines available to patients via prescription. Additionally, its subsidiary, Peak Processing Solutions, manufactures legal cannabis products for adult consumers in retail settings.

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