Maricann Group Inc.’s (CSE:MARI) Chairman and Director have resigned following an Ontario Securities Commission review
SmallCapPower | March 2, 2018: Maricann Group Inc. (CSE:MARI), after the market close on March 1, 2018, announced that it has received a notice of termination from its Underwriter that it will not proceed with a $70 million bought deal equity financing at a price of $4.00 per unit. Maricann Group added that the notice of termination received from the Underwriters did not provide the reason for the Underwriters terminating their obligations under the Underwriting Agreement.
Maricann Group also asserted that it is fully financed for existing commitments with approximately $48.2 million of cash on hand, following the closing of the special warrants financing where the Company raised $40.25 million in gross proceeds.
Meanwhile, Maricann Group’s Chairman Raymond Stone and Director Neil Tabatznik have stepped down and Paul Pathak has been appointed as interim chairman of the board.
This comes on the back of the Ontario Securities Commission (OSC), Canada’s biggest securities regulator, conducting a review of certain trades of shares owned or controlled by Stone and Tabatznik and Eric Silver, who have informed the Company about their full cooperation with the regulator.
Maricann Group added that its Chief Executive Ben Ward is under investigation by the regulator for his activities while he was CEO of Canadian Cannabis Corp., a wholly unrelated company. OSC has not revealed the details of investigation at this point of time.
The Company’s board of directors has set up a special committee of independent directors that has full authority to look in to the matter and make recommendations to the board on the further steps that are necessary to be taken. The special committee has retained Osler, Hoskin & Harcourt LLP to act as its independent legal counsel in connection with these matters.
“We have heard from many significant shareholders of the Company about their concerns with these matters, and we share them. In these circumstances, we appreciate Messrs. Stone and Tabatznik having resigned. The special committee’s review is ongoing, but we are committed to providing the stakeholders of the Company with a further update on its review shortly,” said Paul Pathak on behalf of the special committee.
Established in 2013, Maricann Group has production facilities in Langton, Ontario and Dresden, Germany. On January 24, the Company announced a proposed acquisition of all outstanding shares of Haxxon AG, a cultivator of female hemp cannabis flowers based in Regensdorf, Switzerland, for an aggregate purchase price of CHF 8 million. The deal is targeted to close by March 30, 2018 allowing Maricann Group to produce cannabis flowers in Switzerland, which would be manufactured into products like cannabis vape cartridges, cannabis pre-roll cigarettes with no tobacco etc.
Maricann Group is currently undertaking an expansion of its cultivation and support facilities in Canada in a 942,000 sq. ft. build out, capable of producing 95,000 kg of dry cannabis flower per year to support existing and future patient growth.
Post announcement by Maricann Group, its shares on the Canadian Securities Exchange (CSE) fell steeply by ~21% to close at $1.70 on Wednesday, from previous day’s closing price of $2.49.
Disclosure: Neither the author nor his family own shares in any of the companies mentioned above.
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