Althea CEO and founder resigns after medicinal cannabis exit

The recently completed sale of Althea Group's (ASX: AGH) medicinal cannabis business finalised its pivot to selling THC drinks in North America, and with it the tenure of founder and CEO Josh Fegan.

The former Strathfield Car Radio franchisee founded the business in 2017 - a year after medicinal cannabis was legalised in Australia - and listed Althea on the ASX the following year, raising $19.65 million in an initial public offering (IPO) as it steadily became one of the best-known brands in an emerging industry.

Fegan was only 32 years old when he started the business, which built a convenient software platform Althea Concierge to assist doctors with understanding and prescribing medicinal cannabis, as well as helping with compliance matters.

With its market strategy bolstered by the app, the company's number of patients rose 10-fold to more than 1,000 between Althea's listing in October 2018 and June 2019.

Amidst this traction for its core business of selling medicinal cannabis, Fegan and the board made a fateful decision to diversify in 2019, acquiring a Canadian contract extraction and manufacturing company called Peak Processing Solutions via cash-and-scrip deal with earnout targets backed by a $30 million capital raise. 

As Canada had just legalised recreational cannabis use, opportunities were ripe for a company like Peak to produce cannabis-infused edibles, drinks, nutraceuticals and cosmetics products.

At the end of that year, Fegan won the coveted Trailblazer prize at the Melbourne Young Entrepreneur Awards. 

By the end of FY21, Peak accounted for just over 10 per cent of the group's $11.5 million in revenue, with most of Althea's cash flow coming from medicinal cannabis sales to 20,000-plus patients across Australia and the UK, where it held market shares of 25 per cent and 32 per cent respectively.

Three years later in FY24, Peak's influence on the group had grown considerably with revenue of $11.68 million, representing more than a third of total sales. Towards the end of that financial year Peak expanded into the US cannabis-infused beverage market.

However, Althea group's bottom line had worsened as its annual loss ballooned by 133 per cent to $32 million, including a $17.74 million non-cash impairment for Peak Canada which it described as an accounting adjustment given earnout targets in the acquisition agreement hadn't been met.

In October last year, as part of cost-cutting measures, the group sold its MyAccess Clinics business in the UK and Ireland for $1 million to the European arm of fellow Melbourne-based group Montu, and in February 2025 revealed it was "assessing strategic alternatives" for its medicinal cannabis arm to maximise shareholder value.

This ultimately led Althea to reach an agreement a few months later with Tasmanian Botanics to sell its pharmaceutical medicinal cannabis assets for $1 million, which at the time was described by Fegan as a "pivotal moment" for the group as it turned its full attention to North America.

The group thus withdrew its FY25 guidance that was so highly interconnected with the medicinal cannabis business, and on 9 July it was announced the sale had been completed.

As a result, subsidiary Althea Company Pty Ltd no longer held or operated any material assets, and it was resolved that it be placed into voluntary administration with expectations the matter would have no material impact on the broader group.

Now describing itself as a leading fast-moving consumer goods (FMCG) organisation specialising in the manufacturing, sales, and distribution of THC beverages, Althea Group announced today that Fegan had resigned from his positions as chief executive officer and director with immediate effect.

The group highlighted his pivotal role as founder and CEO since Althea's inception in "contributing to the uptake of medicinal cannabis in Australia and the UK, helping to expand patient access and education through Althea’s early market leadership".

Althea also emphasises Fegan's instrumental role in the company's entry into the THC beverage markets of Canada and the US, thanking him for his "vision, leadership, and significant contribution over many years".

"The board thanks Mr Fegan for his tireless efforts in leading the Althea business since its inception and wishes him well in the future," says Althea Group chairman Vaughan Webber.

Fegan has thanked the group's employees, shareholders, board and valued partners for their "support and belief" in the company.

"Founding and leading AGH through some of the industry’s most challenging early years has been a defining experience," says Fegan, who as of the last annual report held 14.13 per cent of shares, worth approximately $1.6 million today.

"We found our way through enormous obstacles, and I leave the business with genuine purpose, strong foundations, and a bright future."

Althea Group has appointed Peak Processing Solutions managing director Barry Katzman as its interim CEO, noting that during his leadership over two-and-a-half years its revenues have tripled.

"The Board welcomes Mr Katzman to the leadership role and looks forward to working closely with him to drive the growth of our THC beverage business," says Webber.

"I welcome the opportunity to lead this business at this important inflection point," adds Katzman.

"Myself and our team are very well-suited and eager to leverage our THC beverage expertise globally and look forward to working closely with the board in executing our THC beverage strategy both in Canada and the United States."

Investors responded negatively to the news today with AGH shares down 6.67 per cent at 2.8 cents per share (cps) at 3pm AEST.