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Investment dealer Eight Capital has replaced its chief executive officer in the wake of a failed and controversial transaction for marijuana financier Cannabis Wheaton Income Fund Corp.

Dave Chan/The Globe and Mail

Investment dealer Eight Capital has replaced its chief executive officer in the wake of a failed and controversial transaction for marijuana financier Cannabis Wheaton Income Fund Corp.

Employee-owned Eight Capital, formerly known as Dundee Securities, stated on its website that former CEO Mark Attanasio is now a managing director of investment banking. The new head of the Toronto-based firm is David Morrison, who will also continue to run the equity sales and trading desk.

Executives at Eight Capital did not return calls Wednesday for comment on the moves.

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The change in leadership comes after Eight Capital and Cannacord Genuity Corp. "mutually agreed to terminate" the two dealers' mandate to raise $80-million for Cannabis Wheaton, the company said in a press release earlier this week.

As part of the sale of securities, Cannabis Wheaton disclosed that employees at Eight Capital and Cannacord own approximately 8 per cent of the company, a stake they acquired for pennies per share. Cannabis Wheaton shares closed Wednesday at 95 cents on the TSX Venture exchange.

Mr. Attanasio is one of the Eight Capital employees with a significant personal investment in Vancouver-based Cannabis Wheaton, according to a number of sources familiar with the transaction, along with colleague Donato Sferra, who is also a managing director of investment banking at the firm.

Internal tensions generated by the two executives' personal holdings, along with the loss of a Cannabis Wheaton mandate that would feature approximately $4-million in fees, led directly to the leadership changes at Eight Capital, according to a number of sources familiar with the firm.

Cannabis Wheaton hired a new investment dealer on Tuesday, Mackie Research Capital Corp., and is now attempting to raise $50-million, money that the company plans to use to finance fledgling pot producers.

The public market for cannabis companies is booming, although stock prices have slid in recent months on concerns over heady valuations. Numerous small pot producers went public and raised money to build growing operations and get government licenses for medical marijuana ahead of the potential legalization of recreational weed in Canada next year.

The bank-owned investment dealers that dominate domestic capital markets are currently steering clear of pot stocks, due in part to the reputation risks and liabilities they see in the sector.

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Eight Capital is one of several independent dealers to step up as an active player in the sector; the firm won roles in more than a dozen stock sales from weed producers over the past 18 months. Mr. Attanasio and Mr. Sferra worked on these transactions.

Mr. Morrison, the new CEO, previously worked for a number of independent houses and bank-owned dealers, including CIBC World Markets and Genuity Capital Markets. Mr. Morrison ran equity sales teams at both those firms, working with head trader John Esteireiro, who is also now a senior executive at Eight Capital.

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