Medical pot firm financing in limbo.
TORONTO• Medical cannabis firm Maricann Group
Inc.’ s chair and a board director have stepped down and its recent $70-million financing is in limbo as Canada’s biggest securities regulator conducts a review of certain trades by its directors.
The announcements Wednesday sent shares of the company, which produces and distributes medical marijuana, down as much as 30 per cent on the Canadian Securities Exchange to $1.70 per share from Tuesday’s closing price of $2.49.
Maricann has not received an official notice of termination for the boughtdeal offering announced last month, but said it has been advised orally by the underwriters that they are not prepared to proceed.
The company, based in Toronto and Munich, announced chairman Neil Tabatznik and Raymond Stone, a director, have resigned. Paul Pathak has been appointed interim chairman.
The moves come as Maricann says the Ontario Securities Commission is reviewing the timing and reporting of certain trades of shares owned or controlled by Stone and Tabatznik and Eric Silver.
It added that the regulator has also told the company in a letter dated Feb. 8 that Maricann chief executive Ben Ward is the subject of an investigation into his activities while he was CEO of Canadian Cannabis Corp., a wholly unrelated company.
“Prior to this, the company was unaware of the matter,” Maricann said in a statement Wednesday. “The company is unaware of any facts that could reasonably lead it to conclude that this investigation has had, or will have, any impact on the ability of Mr. Ward to properly and effectively carry out his duties as CEO or director of the company.”
According to insider trading records, Tabatznik on Jan. 23 sold 412,000 shares he indirectly owned through Copper Lake Investments Inc. at roughly $ 4.16 each or a total of $ 1.714 million. A day later, Tabatznik sold 438,000 shares at roughly $ 4.26 each, or a total $ 1.864 million. And on Jan. 25, he sold another 5,000 shares for $4.25 each, or $21,250.
Stone also sold shares he indirectly owned, through either Felicity Stone or R & FS Investments Inc., in January. On Jan. 22, records show he sold 915,837 shares for roughly $4.22 each or $3.87 million. A day later, he sold 104,421 shares at $4.20 each, and another 128,000 for $4.22 each, or a total of $978,728.
Maricann’s shares closed Wednesday at $1.97, down 21 per cent.
Maricann, founded in 2013, has production facilities in both Langton, Ont., and Dresden, Germany.
It has been ramping up production capacity at home, as Canada moves to legalize marijuana for recreational use later this year, expanding its cultivation and support facilities in Canada to 87,515 square metres. When complete, Maricann’s facility is expected to produce 95,000 kilograms of dry cannabis flower per year, the company says.