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Cannabis Wheaton CEO Chuck Rifici.

Adrian Wyld/The Canadian Press

Marijuana financier Cannabis Wheaton Income Corp. hired a new investment dealer Tuesday to raise $50-million for the company, resurrecting a much-watched deal that features the company's lawyer and former bankers as significant personal shareholders.

Cannabis Wheaton hired Toronto-based Mackie Research Capital Corp. to sell securities in a transaction that is expected to close by June 21, after announcing on Monday that it cut ties with investment banks Eight Capital and Canaccord Genuity Corp. on a planned $80-million offering.

Employees of Eight Capital and Cannacord own approximately 8 per cent of Vancouver-based Cannabis Wheaton. The company's lawyer, Hugo Alves at law firm Bennett Jones LLP, is also a shareholder; Mr. Alves declined to comment on how much stock he owns.

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Cannabis Wheaton's legal and former financial advisers are among the insiders who purchased stakes in the company for pennies a share earlier this year. Cannabis Wheaton stock closed Tuesday at $1.13 on the TSX Venture Exchange.

These Cannabis Wheaton backers collectively own 55 per cent of the company and are free to sell a third of their stakes six months after the close of the Mackie-led offering, another third after nine months and the remainder after one year.

Fund managers are questioning the issues that arise when insiders own significant stakes in the stocks they are selling to investors.

"We are employing a high degree of caution with respect to the marijuana sector as investor interests have been overshadowed by lucrative sell-side opportunities … in our view, this is an accident waiting to happen," said a report in April from fund manager Steven Palmer, chief executive of AlphaNorth Asset Management. "Promoters are benefiting from owning seed stock, which they continue to distribute at significant profits at the expense of retail shareholders."

Pot stocks are all the rage in Canadian capital markets, ahead of planned federal legalization of recreational marijuana use. Cannabis Wheaton is raising money that will be used to fund fledgling marijuana producers in exchange for a percentage of future revenues. The financing approach is known as streaming and was developed in the mining industry. Cannabis Wheaton is the first company to apply the concept to marijuana producers; to date, it has struck deals with 14 companies.

"Mackie Research has made a very strong show of support for Cannabis Wheaton and the company's innovative platform," Cannabis Wheaton CEO Chuck Rifici said in a press release.

Mr. Rifici, former CEO of pot producer Canopy Growth Corp., said: "We are excited to proceed with the offering in accordance with our original timeline and look forward to working with our streaming partners to advance our collective goals."

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