Bright Green Former CEO Claims Valuation Fraud

The back story of the cannabis concept stock Bright Green (NASDAQ: BGXX) involves a burned-down building, a years-long battle with the state of New Mexico, a bankruptcy case, and an angry former CEO who is accusing the company of fraud. Bright Green recently began trading on the NASDAQ (NDAQ) as a direct listing, not as an Initial Public Offering (IPO). The stock shot up almost immediately to $58 and has since sold off and was lately selling at $3.54.

Direct Listing vs. IPO

 In an IPO situation, founders, employees, and other early-stage investors are typically restricted from selling their stock right away. According to the NASDAQ website, “Companies choosing a direct listing typically have had no immediate need for additional capital, have a large and diverse shareholder base and are a well-known brand with an easy-to-understand business model. Recent examples of direct listings include Coinbase (COIN) and Spotify (SPOT).” 

No additional shares are offered to the public, which reduces scrutiny. The public can only buy the shares that are sold by the insiders. Requirements from NASDAQ about direct listings state that in the NASDAQ Capital Market guidelines, “The listing company must have a recent valuation from an independent third party indicating in excess of $10 million to $30 million in the aggregate market value of publicly held shares, depending on the financial standard met. (Rule 5505).” In addition to the valuations, companies also have pre-tax income requirements – which Bright Green doesn’t meet. In fact, the company only has net losses. This valuation figure is a key element in the complaint from the former CEO John Fikany. 

Lucky for Bright Green it clearly states in its S-1,  “Because of our novel listing process on the Nasdaq Capital Market, Nasdaq’s rules for ensuring compliance with its initial listing standards, such as those requiring a valuation or other compelling evidence of value, are untested. In the absence of a prior active public trading market for our common stock, if the price of our common stock or our market capitalization falls below those required by Nasdaq’s eligibility standards, we may not be able to satisfy the ongoing listing criteria and may be required to delist.” So, the company discloses right up front that it may not be able to even stay listed on NASDAQ. 

There are currently several companies that have been approved by the DEA to sell cannabis to the Federal Government for research purposes, so the concept cannabis company actually does have existing companies for comparison in order to determine a true valuation. Granted they aren’t trading publicly, but they aren’t untested with regard to valuations. However, it doesn’t matter because Bright Green already says if it can’t meet those requirements then it will just delist. That’s of course after insiders sell their shares. 

Bankruptcy Disclosure

Another thing that is unique about companies going public is that the SEC requires a bankruptcy to be disclosed to potential shareholders. The idea is that investors should have adequate information in order to make a wise investment decision. In the case of Bright Green, the company states that no director or executive officer has filed for bankruptcy. In 2017, John Stockwell was listed as the CEO of Bright Green according to this Albuquerque story which stated the greenhouse would open in 2017. He is no longer listed as having a role in the company. However, his wife Lynn Stockwell is a Director of Bright Green and John Stockwell did file for bankruptcy in the state of New Mexico in 2015. 

Stockwell is a Canadian citizen and his next-door neighbor in Canada was Jerry Capussi who is suing for shares of Bright Green. According to the bankruptcy documents, in about 2003 Stockwell purchased the assets of Agstar of New Mexico, Inc., including greenhouses in Grants and Estancia, New Mexico. These properties became the Sunnyland Farms. 

Sunnyland Farms Burns Down

The documents state that Stockwell approached Capussi and asked for assistance in starting a greenhouse business in New Mexico. Although Capussi never signed any contracts with Stockwell, he met with state officials, helped put together business plans, talked to potential vendors, traveled to New Mexico, provided meeting facilities, and the like. That business was called Sunnyland Farms based in Grants, New Mexico where Bright Green Cannabis is based. 

Unfortunately, one of Stockwell’s employees inadvertently started a fire at the Estancia greenhouse. Even worse, the Central New Mexico Electric Cooperative (“CNMEC”) had shut off the electricity at the greenhouse. Without electricity, they couldn’t pump water to fight the fire, and the Estancia greenhouse was destroyed. The fire apparently devastated Stockwell financially according to the bankruptcy documents.

He sued CNMEC in 2005, alleging that the utility wrongfully disconnected the electricity service and was awarded about $22 million in damages. CNMEC appealed the judgment and won giving Stockwell little more than his attorney fees. On further appeal, in 2013 the New Mexico Supreme Court reversed the Court of Appeals’ decision in part, increasing Stockwell’s award to about $7.4 million. CNMEC gave up and paid this judgment amount. After attorney fees were deducted, he was left with about $5.45 million in cash. Unfortunately, this was “fully encumbered by the first lien of the Stockwell’s pre-petition secured lender.” Capussi was awarded $108,000, which was a much smaller amount than the $2 million he had wanted. The Bright Green filing says that Capussi is suing for 108,000 shares of the company. At some point during these years, it seems the Sunnyland greenhouses were transferred to Lynn Stockwell who then transferred the property to Bright Green. 

Former CEO Claims Fraud

In addition to the Capussi lawsuit, Bright Green’s former CEO John Fikany is also suing the company. Michigan-based Fikany is an accomplished executive who was once Vice President, North America sales strategy for Oracle, Vice President at Microsoft, and Vice President at Quicken Loans. In his lawsuit, he claims that the Stockwell’s approached him to be CEO. Even though he said he had other offers on the table, the Stockwells said they could pay more. He began working for the company on May 1, 2018, as CEO with a salary of $1 million and was to receive $500,000 on the first day of employment. He was also to get 2.5 million shares. Fikany also says in the lawsuit that his employment wasn’t contingent on any specific measures of success. After six months of work, Fikany had yet to be paid.

Acoma Pueblo Gov. Kurt Riley, surrounded by members of Tribal Council and Acoma Business Enterprises, signing a business agreement with Bright Green Group on Dec. 16, 2017. Photo published by Albuquerque Business First

While he was employed, Fikany was working on a deal for Bright Green to develop a cultivation facility on Indian land with the Acoma Pueblo tribe. The deal had been in the works prior to Fikany coming on board but hadn’t actually closed. According to the court document Fikany claims that Stockwell almost torpedoed the deal, but he was able to save it. The only thing keeping the deal from being consummated was that Bright Green needed to deposit some escrow money. Ultimately, Stockwell refused to send the escrow money to the Acoma Pueblo and that deal fell through. The Acoma Pueblo sent documentation to formally withdraw from the deal. 

While Fikany was working to secure the deal with the Acoma Pueblo he was also working with Stockwell to prepare the company to go public. One issue that arose during the process was the valuation of Bright Green. Stockwell was responsible for hiring the advisors to determine the number, but Fikany said the valuation was “misleading and aggressive”. At this point, the company actually paid Fikany his one and only paycheck of $19,230.77. He also supposedly received another 2.5 million shares. Undeterred, Fikany continued to push back.

Fikany says he was concerned about the false and misleading nature of Stockwell’s valuation report asking, “How is it possible that we continue to radically increase our valuation from $1.5 billion to 2.5 to 4.0 to 6.5?” According to the complaint, Fikany became worried his name would be attached to the company’s valuation statement, which he believed was false and inaccurate. In July 2019, the company issued a letter to investors with the alleged inflated valuation over Fikany’s opposition. He expressed his fear that his reputation would be at risk for knowingly telling investors that Bright Green had a valuation that was incorrect. He was then terminated.

Bright Green Is A Sham

Fikany says in his lawsuit that Bright Green was “a sham, operated illegally and fraudulently.” He alleges that the Stockwell’s “engaged in acts of fraudulent misrepresentation and attempted to force Fikany to aid and abet them in making fraudulent misrepresentations to investors concerning the valuation and progress of Bright Green Corporation.” He is suing for $1.7 million in unpaid wages. 

The Stockwell’s deny the allegations about the misrepresentation of the valuation of Bright Green, but they do admit that the deal with the Acoma Pueblo did fall through. Bright Green in its statement suggests that Fikany was hired to complete the Acoma Pueblo deal, which ultimately never closed. Thus, he didn’t meet the conditions of his employment and was terminated. 


Bright Green’s current CEO is Edward Robinson. He took over the role in 2019, although his LinkedIn profile only states he is a special advisor, he is on the company website as the CEO. Robinson was the Chief Executive Officer of BMW Financial Services for the America’s Region from April 2005 to December 2016. He gets an annual base salary of $540,000 paid in monthly installments. The employment contract reads, “Robinson shall receive monthly payments in the amount of $6,750 with an aggregate of $344,250 in deferred compensation due and payable on or before December 15, 2022.” Robinson got 5.6 million shares, while his wife Elaine Robinson received 605,000 shares. 

John Stockwell’s Connection

Left to right: Dean Valore, Ed Robinson, Terry Rafih, Lynn Stockwell, John Stockwell, Robert Arnone.

John Stockwell supposedly has no official role in Bright Green, but he was featured in a photo (above) of a groundbreaking ceremony in New Mexico in October 2021. Typically in groundbreaking ceremonies, only top executives or board members take the stage. Stockwell’s wife Lynn Stockwell is a Director of the company and owns 44% of the voting shares or 69 million shares.  In 2020, she lent the company $392,194 and has no fixed repayment term. She was at the groundbreaking ceremony for the $300 million planned research complex, even though the company has nowhere near that amount of money. This is also the second groundbreaking ceremony. 

At the time Lynn Stockwell said, “With the cooperative spirit of federal, state and business we found in New Mexico, we will see New Mexico and Bright Green Corp. become leaders in this emerging field of medical research.

The facility in Grants, New Mexico is supposed to be “A two-acre Fast Start University Greenhouse to begin housing our cannabis research, development, cultivation, and manufacturing operations.”  Bright Green also stated in its filing that its existing 22-acre Venlo greenhouse is currently under renovation to be operational in May 2022 and provide the initial supply of marijuana and marijuana extracts. The company has also said that it will be able to harvest its first crop of cannabis in two months, however, any cannabis cultivator will say that it takes at least 3-8 months for a cannabis plant. Bright Green could purchase more mature plants to speed up the process, but then the DEA would actually be buying someone else’s plants. 

In Closing

Most companies clean up lawsuits before going public so that investors won’t see the dirty laundry. In this case, Bright Green plowed ahead. The company played up its connection to the DEA suggesting that the Memorandum of Agreement was a done deal, even though the company doesn’t have a formal contract with the DEA. The DEA also would not confirm it had a contract with Bright Green and wouldn’t comment on the MOA. The NASDAQ seems to be playing along even though it also doesn’t seem to have vetted the company’s valuation claims. Other financial media also jumped in and never looked beyond the company’s press release and helped tout the idea of a cannabis company trading on the NASDAQ. That boosted the share price in the early days further enriching the sellers. Looking at the track record of Sunnyland and then Bright Green, it will remain a stock to keep under the microscope. 

Debra Borchardt

Debra Borchardt is the Co-Founder, and Executive Editor of GMR. She has covered the cannabis industry for several years at Forbes, Seeking Alpha and TheStreet. Prior to becoming a financial journalist, Debra was a Vice President at Bear Stearns where she held a Series 7 and Registered Investment Advisor license. Debra has a Master's degree in Business Journalism from New York University.


  • Duane

    June 2, 2022 at 1:57 pm

    Hi Debra, Great article.


  • Johnny Oligo

    June 6, 2022 at 11:39 am

    The bank that helped them list directly should be held accountable.


  • Shir Kandahari

    June 6, 2022 at 8:24 pm

    Can I sue the company it took my 15K out of 30K investment, their fraud resulted in a heavy loss for me


  • Vince

    June 7, 2022 at 5:40 pm

    Not sure I can buy the story about continuing to work even though he wasn’t paid. Something is missing from that narrative.


  • Dan

    October 28, 2022 at 1:02 pm

    The Stockwells are well known for their scam business ventures in their hometown of Leamington, Ontario Canada. Every company that he has been involved with has lost massive amounts of money or gone bankrupt. They have no conscience when it comes to stealing other peoples money from friends and/or relatives. The Sunnyland fire was most likely arson, as he knew with the hydro shut off, he had the perfect storm to destroy the place, and make it look legit. Many of the scams are basically pyramid scams. They will live high on the hog one day, and the next they won’t open their door for registered mail, because of lawsuits and creditors trying to get their money. The Bright Green Corp. is just another scam to spend other unsuspecting people. Do your homework people!!


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