Well-liked cannabis industry leader Issac Dietrich was ousted by the Board of Directors of MassRoots (MSRT) in a vote that was held on Monday. The Chief Executive Officer of MassRoots was voted out as the company continued to burn cash and the stock price was plummeting. Scott Kveton has been named the new Chief Executive Officer.
Some members of the company’s board (and supposedly including Kveton) had been unhappy with Dietrich’s decision to acquire CannaRegs for $12 million. Several in the cannabis industry complained that the price was too high for the company even though private investors had been willing to pay $10 million for CannaRegs and the company had no debt and was bringing in $500,000 a year in revenues. Amanda Ostrowitz was named President of MassRoots and it had been rumored that she would ultimately be named Chief Executive Officer.
Instead, it seems Kveton orchestrated a board meeting planned for Monday to fire Dietrich, who founded the company and to date had raised over $20 million for MassRoots. Dietrich had been sending emails over the weekend to shareholders asking for their support in the battle. An inside source claims Dietrich not only had the support of the shareholders to remain but also the votes to remove the board. While Dietrich may have had a majority of the shares to keep him in place, there was no formal vote. Ostrowitz is currently out of the country and wasn’t at the board meeting.
Kveton supposedly had been very much against the CannaRegs acquisition and the idea of Ostrowitz potentially becoming CEO. Kveton was Vice President of the company prior to being named CEO and had only recently joined the company in July when his company Odava was acquired by MassRoots. Following the acquisition, Kveton was named Director of Business Development.
MassRoots had come under questioning for stock promotion activities recently in association with a company town hall meeting. At the time, Dietrich denied any knowledge of stock promotion by the company. However, one stock promoter claimed it was true and that they had been paid for stock promotion at that time. As recently as last week, MassRoots paid several thousands of dollars to have the stock promoted on websites like Stock Commander ($10,000) and Small Cap Leader ($13,000). Coincidentally ahead of this weekend’s vote. The stock rose from a low of roughly 30 cents to approximately 44 cents. The stock is now dropping over 16% to 36 cents.