Germany Archives - Page 2 of 2 - Green Market Report

Joanne CachaperoAugust 18, 2022

Like the plot of an improbable fintech thriller, cannabis e-investment conglomerate JuicyFields has imploded into an apparent Ponzi scheme of massive proportions, leaving tens of thousands of online investors wondering who is responsible for the biggest swindle in cannabis.

Swedish attorney and CEO of PRIO Startup Ltd., Lars Olofsson, places partial blame on international banking systems, because several transactions generated by the JuicyFields platform should have triggered institutional systems that detect suspicious activity.

Financial regulatory agencies in in Germany and Spain also issued warnings about the company weeks before JuicyFields’ collapse in mid-July, when investors accounts were frozen.

“Several companies, organizations and individuals have facilitated this. An operation like this could never operate in a vacuum. It needs all kinds of suppliers who directly or indirectly facilitated or looked the other way,” Olofsson told Investor Times last week.

Recent developments indicate that suspended Australian fintech company iSignthis (ISX) and its subsidiary ISX Financial EU may be implicated in the scandal. Olofsson confirmed that the Australian bank received funds from JuicyFields.

By the end of July, Olofsson had been contacted by more than 300 victims, with an average investment of €30,000 each. He is one of several European attorneys listed on the JuicyFields’ website as taking cases of victims.

The scope of the scam is potentially enormous.

Fortune.com noted that JuicyFields may be the largest “crypto scam” of 2022, with investors out $273 million in bitcoin alone, though others speculate the actual amount will be in the billions. In Spain, attorney Emilia Zaballos said that her firm has received more than 6,000 emails in regard to the case.

Class action suits are beginning to take shape, though getting to the bottom of the rabbit hole will be complicated. There are dramatic theories regarding who may own the company and if they have absconded with the funds, or if the accounts were drained by hackers.

A revolving door of C-suite players, shady operators behind the JuicyFields website and alleged Russian mob characters left behind a confusing breadcrumb trail of addresses and registrations, in Amsterdam, Switzerland, Zurich and elsewhere – all of which lead to nowhere and no one.

Former JuicyFields executives basically have disappeared. Luxemburg-based publication Delano reported: “Identifying the companies involved – which may well be fictitious – locating their directors and tracing the flow of money will be a long-term task.”

Of no reassurance to JuicyFields’ victims, Olofsson added that he believes Russian organized crime involvement may be a strong possibility, though he has no conclusive evidence supporting that assertion.

Industry insiders and pundits said that JuicyFields’ business model and marketing tactics were suspicious from the start. Some pointed out that industry media on the topic was sparse, but piecemeal posts on social media hinted that all might not be quite right at the investment platform.

That didn’t stop international investors from signing up for promises of rapid returns – more than 50% in little more than 12 weeks – on per-plant investments with the JuicyFields cannabis growers. Clients were allowed to deposit up to €180,000 per account without background checks typically required for such investments.

The company invested heavily in marketing, becoming a splashy presence at industry trade shows where they plied potential customers with open bars and attractive spokesmodels.

At the International Cannabis Business Conference, held in Barcelona in March, JuicyFields was a conspicuous show sponsor, with two logo-ed Lamborghinis parked at the entrance to the show and at VIP events hosted by the company. At that time, accounts were still being opened, and investors were encouraged to sign up friends for financial rewards.

JuicyFields’ Timeline of Decline

By early June, the German Federal Financial Supervisory Authority, known as BaFin, issued a ban on investment in the company because it failed to file a required prospectus. Little more than a month later, BaFin levied a €1 million fine against the company for failing to withdraw cannabis for sale in Germany. JuicyFields responded, saying it was revamping its platform to comply with regulations.

By July 11, the company’s IT, customer support and payments “teams” announced they would strike the next day over disputes with management. The announcement triggered a panic among investors, who found themselves unable to withdraw funds from their accounts.

The next day, a Telegram account used by the company to communicate with clients was shut down, and contact information on the website was altered.

Recently appointed JuicyFields CEO Willie van der Merwe released a statement saying that the site had been shut down during “updating” in order to prevent hacking. It was the first of several confusing statements from various executives attached to the company.

On July 13, Communications Director Zvedza Lauric tweeted a video stating the website had been hacked and that the company was waiting to release funds. Statements on other social media said the situation would be resolved within 48 hours.

By July 14, van der Merwe resigned after less than two months as CEO, and company social media accounts started to shut down.

Three days later, former CEO Alan Glanse posted documents that indicated Paul Bergolts, Alex Vaimer and Alexi Kandinski were in control of the company. All are Russian citizens, spurring the Russian mob rumors.

On July 17, Brigit-Elisabeth Neumann, who claimed to have been CFO and a board member, posted a video and written statement claiming that changes to the website were made to “deceive” the platform’s e-growers. Her statement went on to say that she and a group of “directors” who had been listed on the site never had access to or anything to do with the JuicyFields platform.

Neumann indicated that she and these directors had formed JuicyFields AG and would file a complaint against the team at JuicyFields.io ,including Glanse, strategic partner Erika Misela and the Russian trio.

According to Spanish news outlet El Pais, JuicyFields sent out its last, confusing email to customers on July 19, which advised affected parties to “use the following email addresses to submit your story, speak your mind, send collateral for an emergency refund, or embark on a long road of endless conversations with our lawyers.”

The JuicyFields.io website has changed appearance several times since the collapse in July, and it is unclear who is operating it. The landing page now features a purple marijuana plant with Private Grow Operations Project” in a large white font and the JuicyFields logo in the upper left corner.

Screenshot of JuicyFields' website, retrieved Aug. 17, 2022. — Screenshot of JuicyFields’ website, retrieved Aug. 17, 2022.

The page also features what seems to be an open letter for those wishing to file complaints, full of grammatical errors and links to various attorneys and victims’ groups. Cryptic screenshots of texts apparently aimed former executive Friedrich Graf von Luxberg (and his brother Stefan Ludwig), who have been implicated in the scam, also are included.

A link to refund instructions appears near the bottom the page and includes a statement saying that users that have submitted “required collateral” are already being paid from “remaining cash reserves.”

Adam JacksonAugust 2, 2022

Clever Leaves (NASDAQ: CLVR) could become one of the world’s top five cannabinoid exporters by the end of this year, according to a new report by Cantor Fitzgerald analyst Pablo Zuanic. The findings come a week ahead of the company’s second-quarter earnings release and half a year since CEO Andres Fajardo was tapped to lead the company out of a desperate cash burn and into new, more profitable markets overseas.

Clever Leaves’ plan so far seems to be good on schedule. It has inked lucrative deals with players in overseas markets such as Portugal, Germany, Australia, Brazil, Colombia and Israel.

While the outlook is still a “show me” story, it said, the new distribution partnerships add value with the assumption that continued medical market growth in those overseas markets will work to Clever Leaves’ advantage long-term. The estimates do not account for recreational cannabis legalization in Germany or elsewhere.

“Still, while we are positive on the company’s top-line growth outlook, profitability and cash burn are key investment risks,” the report said. “In fact, although the cost base has been rationalized, capex lowered, and debt mostly paid down, cash burn remains an issue.”

Cantor Fitzgerald assigned Clever Leaves an “Overweight” rating and a 12-month price target of $4.50. The stock was lately selling at 94 cents, but its 52-week high was $12.40. Zuanic wrote, “From a purely trading perspective, positive news flow about regulatory changes, especially in Colombia and Germany, could favorably impact sentiment,” as a reason the price could jump.

“In relative terms, the stock offers better “pure-play” exposure to growth in overseas medical cannabis markets,” the report said, “and eventually to (recreational) legalization in those markets.”

Global Business

With Clever Leaves focused on markets outside North America, the key for the company is to capture downstream margins. In general, these markets enjoy better economics due to higher barriers to entry such as EU certification and high start-up costs, as well as fewer licensed growers. Cantor estimates that retail prices in Europe’s medical markets, especially Germany, are three times those seen in Canada. U.S. prices in Israel and Australia are also well above the North American average. As part of its rescoped strategy, the company is now focused on exports to Australia, Germany, Brazil, and Israel.

“Yes, the company is also targeting the U.S., but we see that as more long-term optionality for CLVR’s cannabinoids exports,” the report said.

This year, the company used the bulk of the $23 million equity raise executed in the first quarter — in which the share count increased 45% — to pay down all the convertible debt, as well as borrowings related to the Herbal Brands deal. Additional shareholder dilution remains a risk, “in our view, given ongoing cash burn,” it said, though capex needs are now much lower and inventory levels are expected to come down.

“The main issue is for the company to scale up the top-line (profitably) and minimize cash burn,” the report said. “The company has less than $27 million left in an equity facility, and this could be tapped depending on the timing of overseas market growth.”

Debra BorchardtAugust 21, 2019

Tilray, Inc. (NASDAQ: TLRY) said that it has entered into an agreement with Cannamedical Pharma GmbH through its wholly-owned subsidiary Tilray Portugal Unipessoal Lda. to export a wholesale shipment of $3.3 (€3) million worth of medical cannabis from Portugal to Germany. The shipment, which is expected to be completed in fall 2019, will be Tilray’s first from its state-of-the-art EU campus in Portugal to supply patients in Germany.

“This is a significant milestone for Tilray as we ramp up our capacity to serve international markets and generate revenue from our EU campus through the end of 2019,” says Tilray CEO Brendan Kennedy. “We believe our 2.5 million square feet of cultivation and state-of-the-art processing space in Europe is an important differentiator, which will enable us to reduce costs and improve margins while hedging against regulatory risk.”

Roughly 5.5 % of Tilray’s revenues are generated in Germany, but Cowen & Co. analyst Vivien Azer believes international markets could represent approximately $2.8 billion in business as the company expands into other countries. She has forecast that by 2021, the international business could contribute 30% of the company’s total sales.

Germany based Cannamedical is fully licensed and GDP-certified to import and distribute high-quality medical cannabis products. The privately-owned company is a leading independent supplier of medical cannabis products to 2,500 pharmacies and clinical facilities across Germany.

“We at Cannamedical Pharma are committed to helping doctors, medical specialists and pharmacists improve their patients’ quality of life,” says Cannamedical CEO David Henn. “Tilray’s product has passed our strict quality control standards, and we’re excited to have found a partner able to deliver medical cannabis products for use in Cannamedical’s own brands. We look forward to increasing access for patients in need across the country.”

According to Azer, the international growth for Tilray is expected to be driven by Germany, then followed by Australia, New Zealand, and other countries. She thinks the three countries mentioned will be a $1.1 billion medical cannabis market by 2021.

“We are pleased to enter into an agreement with a partner who shares Tilray’s commitment to product quality and safety and patient access,” says Sascha Mielcarek, Tilray’s Managing Director, Europe. “This initial shipment will be the first of many from our EU Campus in Portugal to Germany as well as other European and international markets.”

Debra BorchardtNovember 8, 2018

Aphria Inc. (NYSE: APHA) is acquiring German-based CC Pharma GmbH, a leading distributor of pharmaceutical products to more than 13,000 pharmacies in Germany. Aphria considers the country a key part of its international expansion.

According to the company statement, Aphria will pay €24.5 million in cash to CC Pharma at closing, with an earn-out multiple on future EBITDA of up to another €23.5 million following closing, if certain performance milestones are met. The acquisition is expected to close in January 2019.

Aphria International had previously signed a deal with CC Pharma to export roughly 1,200 kilograms of medical marijuana from Canada to Germany. CC Pharma was founded in 1991 and is a leading importer and distributor of EU-pharmaceuticals for the German market, with over €200 million in annual revenue. A new division will be created in CC Pharma dedicated to medical cannabis.

“This acquisition strengthens our foothold in Germany, one of the most highly sought-after medical cannabis markets in the world,” said Vic Neufeld, CEO of Aphria. “CC Pharma is cash-flow positive and has significant experience with regulatory requirements and international logistics. It will be a strong addition to Aphria’s presence in Germany, providing deeper access to the important pharmacist channel and advancing our ambitious global growth strategy.”

This isn’t the first effort made by Aphria in Germany. Earlier this year, the company acquired a 25.1% interest in Berlin-based Schöneberg Hospital to support education about the benefits of medical cannabinoids. This was the first step in Aphria’s plans to build and operate pain treatment centers throughout Germany.

“We are focused on leading the way in the medical cannabis market in Germany,” said Hendrik Knopp, Managing Director of Aphria Germany. “By combining Aphria’s expertise with CC Pharma’s established local market presence, we are well positioned to continue on that journey.”

In order to maintain consistent medical marijuana deliveries, Aphria plans to build one of the biggest state-of-the-art GMP certified cannabis vaults in Bad Bramstedt, northern Germany, with a storage capacity of 5,000 kilograms. In addition to that, Aphria is planning on building a Research and Development indoor growing facility in Neumünster, Germany.