MassRoots (OTCQB:MSRT) has suffered a tumultuous week after its board of directors decided on Monday (October 16) to send chief executive officer Isaac Dietrich packing following a low stock performance by the company. Since then the company published an 8-K filing the terms of this separation.
In the days since Dietrich’s firing, shares of MassRoots have declined 39.07 percent to close at $0.26 on Thursday (October 19).
With the exponential growth of the cannabis industry, several adjacent businesses were launched to accompany the success of growers and producers. One of those was MassRoots, which had set itself apart by focusing tech solutions for the cannabis world.
MassRoots hosts over a million cannabis users who review and comment on products and strains through its mobile platform. Odava represented the other element of the company, which is self-described as an iOS-based-point-of-sale and web-based inventory tracking and compliance software for cannabis retailers and cultivators in Oregon.
Impact of Dietrich’s removal from MassRoots
Dietrich was the founder of MassRoots and a major voice in the path of the company up to this point.
According to reporting from Green Market Report, the board grew dissatisfied with Dietrich after he revealed the $12 million acquisition of cannabis tech company CannaRegs. The reporting indicated internal turmoil between the leading powers at the company.
Scott Kveton, who joined the company after his own firm Odava was acquired by MassRoots, has been named the new CEO.
“Kveton supposedly had been very much against the CannaRegs acquisition and the idea of [current MassRoots president Amanda] Ostrowitz potentially becoming CEO,” Green Market Report wrote.
Support from shareholders couldn’t save Dietric
Forbes reported once Dietrich became aware of the not-yet-announced decision, he asked for support from shareholders. An unnamed shareholder told the publication Dietrich had gained a majority of shareholders to vote and let him stay put, removing the board instead.
“However, there seems to be some disagreement over whether a formal vote took place. A source close to Dietrich said a vote did take place to remove the board, but there is no communication from the company to confirm this, which would take the form of an 8-K filing. The board seemed to beat Dietrich to the punch and fired him before he could fire them.”
This 8-K filing was eventually published on Wednesday (October 18). Through it, first reported in New Cannabis Ventures, the company revealed it would pay Dietrich four month’s worth of salary in addition to four months of paid premiums.
The filing alleges that Dietrich is in a timeout for the next three-years to from acquiring any part of the company and has been “prohibited” from influencing the management team at the company. MassRoots held a conference call with shareholders on Thursday.
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Securities Disclosure: I, Bryan Mc Govern, hold no direct investment interest in any company mentioned in this article.