Cannabis Professional’s daily roundup of industry news. View archive here.
Alberta Securities Commission warns of pot stock promotion
The Alberta Securities Commission warned of “potential new scams” related to cannabis stocks in a statement on Wednesday outlining the “top investment risks for 2020.”
“Scam artists capitalize on new and emerging industries as there is often limited information and history available, making it easier to spread false information. The ASC has recently seen increases in potential new scams related to cannabis, foreign exchange and, especially, cryptoasset investments,” the commission said.
“While new industries may give rise to a range of exciting investment opportunities, it is important to understand the risks associated with the business before investing your hard-earned money,” it said.
– Mark Rendell
FSD Pharma to begin trading on Nasdaq’s lowest tier exchange, despite going concern uncertainty
Three months after executing a 1-for-201 share consolidation to lift its stock price up from penny stock status, FSD Pharma Inc. said it will begin trading on the Nasdaq Capital Market, the Nasdaq’s lowest tier, on Thursday.
The stock price of the Cobourg, Ont.-based company shot up 93 per cent on Tuesday ahead of the listing, although dropped 18 per cent on Wednesday. The company already trades on the Canadian Securities Exchange.
FSD is strikingly different than other Canadian cannabis companies that have listed on U.S. exchanges. The company began selling cannabis in August of 2019, but has reported only “nominal” sales. Most of its $88,763 in revenue in 2019 came from subleasing sections of its building in Coburg.
The company posted a net loss of $22.7-million in 2019, and acknowledged in financial statements filed in December that its ability to continue as a going concern is uncertain. The company’s plans to retrofit an old factory in Coburg have been slow-moving, and they were thrown into further question after a messy split with Auxly Cannabis Group, which was financing the retrofit.
“The Company is in the preliminary stages of its planned operations and has not yet determined whether its processes and business plans are economically viable,” the company said in its December filings.
“The continued operations of the Company and the recoverability of amounts shown for property, plant and equipment is dependent upon the ability of the Company to obtain sufficient financing to complete the development of its facilities and extraction processes, and if they are proven successful, the existence of future profitable production, or alternatively, upon the Company’s ability to dispose of its interest on an advantageous basis, all of which are uncertain,” it added.
Nasdaq Capital Market, formerly called Nasdaq SmallCap Market, is the tier of the exchange for early stage companies.
- Mark Rendell
Two executives depart TGOD to reduce G&A expenses
The Green Organic Dutchman’s president and vice president of sales are leaving the company in order to cut down on general and administrative expenses, TGOD announced on Thursday.
Csaba Reider had been president of TGOD since May 2017; Mike Gibbons had been with the company since early 2018. Mr. Reider’s duties will be assumed by TGOD CEO, Brian Athaide, while Mr. Gibbons will be replaced by Robert Gora, TGOD’s VP of medical commercialization.
“The changes we announce today are part of a comprehensive review of our operations to reduce costs and improve cash flow. This will result in significant G&A savings and a leaner more efficient organization,” said Mr. Athaide in a statement.
- Mark Rendell