OTC Archives - Green Market Report

Debra BorchardtDebra BorchardtOctober 31, 2019
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7min11920

The OTC Markets Group and the Canadian Securities Exchange held an Investor Day in New York City on October 30. The event featured presentations from Trulieve Cannabis Corporation (OTCQX: TCNNF; CSE: TRUL), Flower One Holdings Inc. (OTCQX: FLOOF; CSE: FONE), Ayr Strategies Inc. (OTCQX: AYRSF; CSE: AYR.A), TerrAscend Corp. (OTCQX: TRSSF; CSE: TER), Planet 13 Holdings Inc. (OTCQX: PLNHF; CSE: PLTH), Cresco Labs Inc. (OTCQX: CRLBF; CSE: CL) and iAnthus Capital Holdings, Inc. (OTCQX: ITHUF; CSE: IAN).

Richard Carleton, CEO of the Canadian Securities Exchange and Jason Paltrowitz, Executive Vice President of Corporate Services at the OTC Markets Group fielded questions from investors about the sector’s bear market and what they thought could turn things around. Of course, these executives can’t convince investors to start writing buy tickets and it doesn’t seem as if a “Green Swan” moment will occur in the near term to swing stocks back to the past meteoric rises.

“We would like to see a decoupling between US multi-state operators and Canadian licensed producers (LP),” said Patrowitz. “It’s challenging in Canada, and some LP’s have gotten in trouble, which took the group down.” He did add that U.S. companies are working in a completely different environment from the Canadians, but get lumped together. He also pointed out that the market is seeing the emergence of winners and these performers he believes will bring confidence back to the investors.

The two also highlighted the growth they are seeing in other stock markets around the world. Specifically, Jamaica and Africa were mentioned for future promise. They both agreed that there would be more market consolidation

One of the best performers in the sector has been Trulieve, who kicked off the event. The company announced updated guidance of revenue in the range of $220-$240 million for 2019 and for 2020 the revenue is expected to be between $380-400 million. A considerable amount of the company’s growth was due to a rise in the number of medical cannabis patients in Florida, which increased by 19%. Driving patient growth was the introduction of cannabis flower to market, which accounted for 50% of total product sales in the state for the second quarter. As of June 30, 2019, there were 181,000 medical cannabis patients in Florida.

Trulieve CEO Kim Rivers said that 3,000 people new people enter the Florida market every week. The company’s decision to go “all in” on the state is part of its brand penetration thesis. It has  1.7 million sq ft of cultivation, combining low cost and premium facilities. Trulieve expects 44 stores by year-end in the state and assured the attendees that they had no banking issues.

Flower One spoke about its recently acquired product Old Pal becoming the top-performing cannabis flower brand in the state of Nevada according to Headset.

Newcomer Ayr Strategies stressed to the audience that its strategy was to acquire cash flow positive only companies. Chief Operating Officer Jen Drake noted that the company was not reliant on capital markets to fund growth. “We have a lower risk strategy and we’re focused on profitability,” she said. The company created vertical integration in Nevada by buying four companies and is also in Massachusetts. The company has a 2019 forecast for revenue of C$160-170 million and in 2020 the revenue is estimated at $305-C$325 million. The company currently has a market cap of only $46 million and is free cash flow positive every month.

iAnthus reviewed its relationship with Gotham Green and the financing deals that the company has engaged in to keep the company in solid standing. While the New York recreational status was disappointing, the company is nonetheless preparing for that day whenever it does happen.

 

 


William SumnerWilliam SumnerMay 1, 2019
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6min7760

It’s time for your Daily Hit of cannabis financial news for May 1, 2019.

On The Site

Curaleaf

Curaleaf Holdings, Inc. (CSE: CURA) (OTCQX: CURLF) is going to acquire Cura Partners, Inc. the owners of the Oregon-based Select brand, in an all-stock deal valued at C$1.27 billion or $948.8 million. The company said that the acquisition includes Select’s manufacturing, processing, distribution, marketing, and retailing operations and all adult-use cannabis products marketed under the Select brand name, including all intellectual property. The deal is expected to close in 2019.

Emerald Health

Emerald Health Therapeutics, Inc.  (TSXV: EMH) (OTCQX: EMHTF) delivered fourth quarter and 2018 results along with an update of its first-quarter sales. The revenue in the fourth quarter was $1.1 million versus last year’s $279 thousand for the same time period. The net loss in the fourth quarter was $13.9 million, higher than the third quarter’s losses of $6.4 million.

WeedMD

The licensed cannabis producer and distributor WeedMD Inc. (TSX-V: WMD) (OTCQX: WDDMF) announced its financial results for the fiscal year ending on December 31, 2018. WeedMD’s revenue for the full year grew from $1.4 million to $8.2 million, representing an increase of 456%. The company’s net and comprehensive loss declined dramatically, falling from $8.8 million to just $895,128.

In Other News

Golden Leaf

Golden Leaf Holdings Ltd. (CSE: GLH) (OTCQB: GLDFF) has reported its financial results for the 2018 fiscal year. Full-year revenue was $16.5 million, up 43% from $11.5 million in 2017. Gross profit declined slightly from 15% of total revenue ($1.7 million) to 13.3% of revenue ($2.2 million). The company’s comprehensive loss declined significantly, falling from $55.9 million in 2017 to $4.4 million, and its net loss was $4.6 million.  “Looking forward, we remain focused on growing revenue by expanding our retail footprint, product array and cultivation presence throughout the U.S. and Canada. At the same time, we are committed to growing responsibly while improving our margin growth and EBITDA. Towards that end, we have taken several measures this year to increase efficiencies throughout our organization to lower costs, increase cash flow and improve our overall financial performance,” said Golden Leaf CEO William Kulczycki.

Dixie Brands

Today, Dixie Brands Inc. (CSE: DIXI.U) (OTC: DXBRF) (Frankfurt: 0QV) announced their financial results for the fiscal year ending on December 31, 2018. Revenue for the year was $5.7 million, up 73% from $3.3 million in the previous year. Fourth quarter revenue was $1.5 million. The gross profit margin was 52% ($3.01 million), up from 47% ($1.5 million) in 2017. Net losses rose significantly, climbing from $4.3 million in the previous year to $21.23 million. Company management attributes the steep climb to “significant increase in operating and other expenses,” such as its reverse takeover of Academy Explorations Limited and public listing activities.  “The financing and public listing we completed in the final weeks of 2018 set the stage for a breakout year in 2019,” said Chuck Smith, President and CEO, Dixie Brands. “Dixie accomplished a lot as a private company, building up an industry-leading portfolio of more than 100 commercialized products.  We are very excited by our opportunities to invest our capital into strengthening our distribution network and market presence to accelerate our growth.”

Weekend Unlimited

Weekend Unlimited Inc. (CSE: POT) (FSE: 0OS1) (OTCQB: WKULF) today announced the appointment of Chris Backus as Interim President and CEO, effective immediately. Backus was appointed to the company’s Board in March of this year and previously served as a former Senior Officer and Manager with the Royal Canadian Mounted Police (RCMP). Backus will focus on the launch of the company’s wknd! brand product line, generating revenues with CHAMP and Verve beverages in the USA, and the ramp-up of the Northern Lights Organics hemp farm in Canada. “’I am energized to accept this leadership role with Weekend Unlimited. Working with the Board and the team, my focus is entirely toward harnessing the Company’s assets to deliver results for shareholders,”’ said. Backus. “This means an immediate mandate to execute on ready-to-go initiatives that will drive revenues while building strong consumer awareness of the Company’s brands. Simultaneously, we will responsibly advance our initiatives supporting growth in the longer term.”


William SumnerWilliam SumnerApril 29, 2019
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6min6550

It’s time for your Daily Hit of cannabis financial news for April 29, 2019

On The Site

Aleafia Health

Aleafia Health Inc. (TSX: ALEF) (OTC: ALEAF) reported that its 2018 total revenue was $3.3 million versus zero in 2017. The pro-forma combined Aleafia Health and Emblem revenues in 2018 were $11.3 million an increase of 327% over a combined Aleafia Health and Emblem 2017 revenues of $2.7 million. Still, the company delivered a net loss from operations in 2018 of $9.7 million.

Canopy Growth

Canopy Growth Corporation  (TSX: WEED) (NYSE: CGC) announced a key milestone in establishing its Hemp Industrial Park in the Southern Tier region of New York State. It has secured a 308,000 sq. ft. facility on a 48-acre property in Kirkwood, NY. The company said that design development would begin immediately with construction expected to start this summer.

Origin House

Canada-based Origin House (once known as CannaRoyalty Corp.) (CSE: OH) (OTCQX: ORHOF) reported its fourth quarter and year-end results ending in December 2018 in Canadian dollars. The fourth quarter saw revenues of $7.9 million an increase of 638% over last year’s $1.1 million for the same time period. The net loss for the quarter was $6.1 million.

In Other News

Charlotte’s Web Holdings

Charlotte’s Web Holdings Inc. (CSE: CWEB) (OTCQX: CWBHF) has a new CEO. The company announced today that Adrienne “Deanie” Elsner would sign on as its Chief Executive Officer effective May 15, 2019.  Elsner previously served as President of Kellogg’s $3 billion Snack Business Unit. Before joining Kellogg, Elsner worked at the Kraft Foods Company and held various leadership positions, including Executive Vice President and Chief Marketing Officer. Elsner was also named by Forbes as one of the 50 Most Influential Global CMOs. “Deanie’s appointment is timely and aligns perfectly with our corporate evolution from the early stage organization we were just two years ago into a professionally managed public company with top-tier executive talent,” said Hess Moallem, current President and CEO of Charlotte’s Web. Moallem will stay on with the company in an advisory position.

New Leaf Data Services

New Leaf Data Services (NLDS), and the Cannabis Mercantile Exchange (Cannamerx) have signed a data-sharing agreement, upon which Cannamerx will provide NLDS with real-time data generated by its international cannabis and hemp trading platform. NLDS will incorporate the platform into its Cannabis Benchmarks® and Hemp Benchmarks® wholesale price assessments. NLDS will help Cannamerx market its international wholesale cannabis & hemp products auction platform, which includes informing its business partners and subscribers about the benefits of using Cannamerx platform. “We are pleased to have entered into this agreement with Cannamerx, which will expand and deepen the wholesale pricing data that is the foundation for our institutional grade Cannabis Benchmarks and Hemp Benchmarks,” commented NLDS CEO Jonathan Rubin.

Cannara Biotech

Cannara Biotech (CSE: LOVE) (FRA: 8CB) has announced its financial results for the three month and six-month periods ended February 28, 2019. Cannara ‘s revenue for the three-month period was $518,438 and for the six-month period was $1,036,881. The net loss for the three month period was $4,011,926 or $0.01 loss per share. The net loss for the six-month period was $6,317,152 or $0.01 loss per share. The company also raised $37,375,268 via private placement in exchange for 207,640,375 common shares. “Financially, Cannara is very solid, with all costs associated with Phase one construction fully funded and most stabilized operating costs offset by lease revenue,” said Lennie Ryer, CFO of Cannara. “Built for the long run, the next few quarters will be eventful as we complete construction and advance towards the goal of ongoing revenues from our state-of-the-art production and processing facility.


William SumnerWilliam SumnerApril 24, 2019
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5min6770

It’s time for your Daily Hit of cannabis financial news for April 24, 2019.

On The Site

Cresco Labs

Chicago-based Cresco Labs Inc. (CSE: CL) (OTCQX: CRLBF) released its unaudited financial results for the fourth quarter and full year ending December 31, 2018. The fourth quarter revenue was $17.0 million, an increase of 411% over last year for the same time period and up 33% sequentially. The company trimmed its net losses to $2.6 million versus the net loss of $3.0 million for 2017 fourth quarter. The quarter’s pro forma revenue was $22.5 million.

Federal Legalization – Then What?

It is fascinating to step back and observe how the mindset of many in the cannabis industry seems to work. Let’s think through a couple of scenarios and have a peek at the landscape in a post-legalization world. Let’s begin with the following

After the Drama, Where Is Aphria Headed Now?

Even in a space with as much excitement as marijuana stocks, Aphria (NYSE:APHA) stood out for having as much drama as a cable TV show. After all the excitement, what’s next for APHA stock? And have the company’s recent moves made it investable again, or is Aphria only appropriate for the most steel-nerved traders?

In Other News

Grown Rogue

Grown Rogue International Inc. (CSE:GRIN) (OTC: NVSIF), a vertically integrated multi-state cannabis operator, announced that it has entered into a binding letter of agreement to acquire Decibel Farms, Inc., an organic cannabis producer and processor. Under the terms of the transaction, the acquisition will be structured as a tax-free merger and shareholders of Decibel will receive $2 million. Decibel owners Shawn Bishop and Buddy Wilson will join Grown Rouge as Vice President of Manufacturing and President of Sales, respectively.

Aphria

Aphria Inc. (TSX:APHA)(NYSE:APHA) announced that it has closed a $300 million private placement offering to institutional investors. The initial investors exercised their option to purchase an additional $50 million in notes, making the deal worth $350 million. The notes are senior unsecured obligations of Aphria with an interest rate 5.25% per year, payable semiannually on June 1 and December 1 of each year, beginning on December 1, 2019. The notes will mature on June 1, 2024.

TerrAscend

TerrAscend Corp. (CSE:TER)(OTCQX: TRSSF) today released its financial results for the fourth quarter ending on December 31, 2019. Revenue for the quarter was $5 million, up from $1.8 million in the previous quarter. Net loss was $11.7 million or $0.13 per share. The company has $21.7 million in cash and cash equivalents. “We are pleased with our performance in the fourth quarter and have laid the groundwork for success in 2019,” said Michael Nashat, CEO of TerrAscend, in a statement. “We are experiencing strong sales momentum in Canada and are making substantial progress towards becoming a leading US multi-state operator.”


William SumnerWilliam SumnerApril 18, 2019
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4min8180

It’s time for your Daily Hit of cannabis financial news for April 18, 2019.

On The Site

Acreage Holdings

Acreage Holdings, Inc. (CSE: ACRG.U) (OTC: ACRGF) (FSE: 0ZV) announced that on April 17, its subsidiary, High Street Capital Partners agreed to acquire Nevada-based Deep Roots Medical in a deal valued at $120 million. The cash and stock transaction will mark Acreage’s entry into the Nevada market. This deal plants another flag in Acreage’s growing empire bringing the footprint up to 20 (including pending acquisitions) making it the largest company in the US cannabis industry.

Canopy Growth

Canopy Growth Corporation  (TSX: WEED) (NYSE: CGC) is acquiring Acreage Holdings, Inc. (CSE: ACGR.U) (OTC: ACRGF) in a deal valued at $3.4 billion. However, the deal will not be consummated until cannabis is federally legal in the U.S. and assuming the shareholders approve as well as the  Supreme Court of British Columbia.

Greenlane Holdings

The NASDAQ Markets Group (NDAQ) has been notoriously reluctant to list any cannabis related companies, even if they are only ancillary and not plant-touching. It seems vape distributor Greenlane Holdings Inc. has broken through the company’s barriers. Greenlane will begin trading on NASDAQ today with the ticker GNLN after upsizing its initial public offering of six million shares with the offering price of $17. The company had expected to price the shares between $14-$16.

In Other News

Aphria

Aphria Inc. (NYSE: APHA) announced the pricing of US$300 million aggregate principal amount of 5.25% convertible senior notes due in a private placement to qualified institutional buyers. Initial purchasers of the note will have the option to purchase an additional $50 million of notes. The sale of the notes to initial purchasers is expected to close on April 23, 2019. The company intends to use the proceeds of the offering for general corporate purposes, expansion initiatives, and future acquisitions.

Aurora Cannabis

Aurora Cannabis Inc. (NYSE: ACB) announced that the company’s contract with the German Federal Institute for Drugs and Medical Devices has been approved. Now that the contract has been approved, Aurora will start construction on an indoor cannabis production facility in Leuna, Germany in May of this year. The facility is expected to be completed within a year of breaking ground, and Aurora believes that the facility’s first harvest will be completed by October 2020. At minimum, the facility should produce approximately 4,000 kilograms of cannabis over a four-year period.


William SumnerWilliam SumnerApril 4, 2019
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4min8350

It’s time for your Daily Hit of cannabis financial news for April 4, 2019.

On the Site

Merida Capital

Cannabis private equity fund Merida Capital Partners has launched its third fund for $200 million, which will focus on concentrated, high conviction investments in leading companies in the cannabis ecosystem. The company said that since launching its first fund in late 2016, it has deployed nearly $80 million across its first two funds and now has more than $125MM under management.

McConnell & Wyden Pen Letters To US Federal Banking Finance Regulators Over Financial Services For Hemp Producers

The letters were sent to the U.S. Federal Deposit Insurance Corporation (FDIC), the Farm Credit Administration, the Federal Reserve System and the Office of the Comptroller of the Currency. The letters read as follows.

Marijuana Stocks Look Frothy, But Aurora Stock Is Well-Prepared

Over the long run, I remain net bullish on legal marijuana. However, my optimism for the sector doesn’t cloud reality. I can see as plain as daylight that the honeymoon phase is over. Now, companies like Aurora Cannabis (NYSE: ACB) must provide the goods. If not, ACB stock could face serious trouble.

In Other News

Harvest Health & Recreation

Harvest Health & Recreation, Inc. (CSE: HARV) announced that it has entered into a brokered private sale of up to 500,000 convertible debentures of the company, at a price of $1,000 per debenture. The sale is expected to raise $500 million and will be closed in five tranches over a period of no more than 18 months. The first tranche is expected to close on May 1, 2019. Proceeds from the sale will go towards general corporate purposes and working capital.

Halo Labs

The cannabis extraction company Halo Labs Inc. (OTC: AGEEF) announced that it has raised $18,143,000 in a convertible note offering. The proceeds of the offering will go towards leasehold improvements, the purchase of extraction equipment, working capital and general corporate purposes.

Aurora Cannabis

Aurora Cannabis Inc. (NYSE: ACB) announced that it has appointed Carey Squires as its Executive Vice President of Corporate Development and Strategy. Squires recently served as Managing Director and Co-Head of Equity-Linked Capital Markets for BMO Capital Markets. In his new role, Squires will focus on developing strategic partnerships, growth initiatives, and investor development.


William SumnerWilliam SumnerOctober 26, 2018
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5min6020

It’s time for your Daily Hit of cannabis financial news for October 25, 2018.

On the Site

MedMen Enterprises

MedMen Enterprises (MMNFF) reported fourth quarter revenues of $20.6 million, an increase of 1,317% over last year’s $1.5 million and a 44% sequential increase over the third quarter revenue of $14.3 million. The jump was attributed to the number of stores that came online during the quarter. However, operating expenses for the fourth quarter, including SG&A, was $72.6 million.

Canadian Cannabis Companies Report Record Sales Post-Legalization

It has been a little more than a week since recreational cannabis sales were launched in Canada, and already the policy has become a big hit. Millions of dollars in cannabis sales have already been recorded, and in the province of British Columbia alone there have been more than 21,000 transactions.

Cannabis Companies Are Navigating Trump’s Tariffs

Medical Marijuana, Inc. (OTC: MJNA) CEO Dr. Stuart Titus tells Green Market Report how his company has had to navigate the rapidly changing landscape when it comes to President Trump’s approach to international trade and tariffs.

In Other News

Aurora Cannabis Inc.

Aurora Cannabis Inc. (ACB) announced that the Polish Ministry of Health has given the company approval to import its first shipment of medical cannabis, which is expected to occur over the next several days. Aurora Deutschland GmbH will ship the product to a hospital and a pain treatment in Warsaw. “Becoming the first company to supply cannabis to Poland is validation of Aurora’s ability to do business in international markets with high barriers to entry,” said Neil Belot, Chief Global Business Development Officer for Aurora. “This is an important milestone for patient access in Poland…”

Namaste Technologies Inc.

Namaste Technologies Inc.  (N) today closed its previously announced bough deal short form prospectus offering, which included the full exercise of the over-allotment option. In total, 17.25 million units of the company were sold at a price of $3.00 per unit; generating $51.75 million in funding. Each unit consisted of one common share and three quarters of one common share purchases warrant. Eight Capital and Canaccord Genuity Corp. acted as co-lead underwriters and joint book runners. The underwriters for the deal received a 6% commission of the gross proceeds. The proceeds from the offering will be used by the company to general working capital; as well as inventory and supplies, capital improvements, personnel and facility operations, etc.

4Front Holdings, LLC

4Front Holdings, LLC announced that it has closed a private placement of equity securities. Initially seeking $15 million, the company increased the initial amount to $31 million due to increased demand. Eight Capital acted as the lead underwriter and bookrunner. The proceeds of the offering will go towards the funding of ongoing investments, the buildout of its multiple Mission-branded dispensaries and cultivation facilities, and for merger and acquisition opportunities. “The success of the Offering demonstrates that our message of pursuing prudent yet aggressive growth is resonating with investors,” said Josh Rosen, 4Front CEO and co-founder. “I’m particularly excited by the caliber of our new investors, as well as the broad participation in the Offering by our existing investors.”


William SumnerWilliam SumnerMay 22, 2018
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4min12460

Leafbuyer Technologies (LBUY) is in hot water after the OTC Markets Group, Inc. flagged the company for heavy stock promotion. In an announcement made after the close of the markets, Leafbuyer disclosed that OTC Markets had questioned the company about a recent distributed newsletter and e-mail promoting the company.

Since February of this year, Leafbuyer has engaged the services of MIDAM Ventures, the parent company of MarijuanaStocks.com, to promote its stock. The amount in which MIDAM was paid by Leafbuyer to promote its stock is somewhat in dispute.

According to the disclaimer in one of the recently released promotional “reports,” MIDAM was paid up to $445,000 in cash as well as 77,000 restricted common shares of the company. Leafbuyer contents that the disclaimer was incorrect and only paid $225,000; which is nevertheless a substantial sum.

The sheer size of this sum becomes even more apparent when you consider the company’s financial situation. According to the company’s most recent filings with the SEC, the company reported sales totaling to the amount of $287,224 and a loss of $1.1 million for the quarter ending on March 31, 2018; up from a loss $339,820 during the same period last year.

With a significant portion of the company’s revenue being spent on promotion, some have begun to question the soundness of this strategy. Alan Brochstein of New Cannabis Ventures described the move as bordering on “sheer lunacy” and urged investors to ask “why the company has been so promotional, as the business certainly appears to be real though not financially stable.”

For their part, Leafbuyer defends its actions by stating that the company’s directors, officers, and controlling shareholders have not sold any company stock on the open market within the last 90 days. Furthermore, Leafbuyer contends that the company’s stock has only declined since engaging MIDAM’s services and that none of its promotional material contained false or misleading information.

In a statement the company said, “The company states definitively that its officers, directors and, to the Company’s knowledge, its controlling shareholders (i.e., shareholders owning 10% or more of the Company’s securities), of which there are only three, have not sold or purchased the Company’s securities within the past 90 days on the open market. The promotional material primarily consisted of previously disclosed and available information. After a review of the material, the statements contained therein are neither materially false nor misleading.”

News of the inquiry by OTC Markets caused the company’s stock to plunge at the opening of the markets today, falling 3.29% from $1.33 per share to $1.29, with some fluctuations.


Debra BorchardtDebra BorchardtApril 6, 2018
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5min38760

The OTC Markets Group, which is home to most cannabis stocks, is taking the lead on identifying stock promotions for its investors. Stock promotion isn’t illegal. What is illegal is not being transparent about it.

Microcaps or penny stocks are especially susceptible to these types of manipulations because information on these companies can often be limited. In 2014, the SEC charged four people with manipulating stock prices for GrowLife Inc and Hemp Inc.

The OTC Markets has employed various tactics to help investors like what it calls the “blunt club” or the skull & crossbones icon that warns the market of bad behavior. However, the OTC doesn’t have the power to engage in disciplinary measures which falls to the SEC. The SEC though doesn’t move very quickly and even if it is investigating a company or person, that information is rarely made public. The OTC believes it can at least react more quickly and warn investors of questionable activity.

In its latest action, the OTC has set up a “Promotion flag” to warn market participants that the trading could be under suspicion. “For market forces to work, it’s got to be about providing more information so investors can make the right decisions,” said Cromwell Coulson Chief Executive Officer of the OTC Markets Group. “The companies have a responsibility to immediately address information regarding trading rumors. We’ve removed issuers because they weren’t truthful about sponsoring promotions.”

Investors can check this page for a list of companies that have recently paid for stock promotions. For example, Hemp Americana (HMPQ) appears on this list and also has a skull and crossbones icon. On the company Overview page under the Caveat Emptor designation, there is now a megaphone icon underneath that says stock promotion.

The process relies on mostly human observation, with either the OTC team spotting the behavior or an investor bringing it to their attention. “The job of the market is to sniff out what’s true and false,” said Coulson, “In the long term, it usually comes out. In the short term? Not so much.” Coulson said the OTC was pushing for changes to the rule called 17-B around anonymously paid promotions.

The SEC also warns about press releases announcing events that never happen or contracts that never get finalized. Other behavior in stock promoting companies that issue a lot of shares without a corresponding increase in assets. The SEC said in a statement, investors should exercise extreme caution if there appears to be more promotion of the company’s stock versus its actual products. It also said that guaranteed high investment returns, “limited time” stock promotions and unsolicited stock recommendations.

Investors are also warned not to feel more comfortable if the promoter suggests you buy the stock through your own brokerage account. Your purchase may be their “sell.” The SEC wrote, “Even if you do not give the promoter any money directly, your stock purchases may enable the organizers of the promotion to offload their otherwise valueless shares.”

In addition to the promotion flag, the OTC has added a shell-risk flag. This icon identifies whether a company is a shell as defined by the SEC. “The term shell company means a registrant, other than an asset-backed issuer as defined in Item 1101(b) of Regulation AB that has: (1) No or nominal operations; and (2) Either: (i) No or nominal assets; (ii) Assets consisting solely of cash and cash equivalents; or (iii) Assets consisting of any amount of cash and cash equivalents and nominal other assets.”

“Over-valuation is the biggest risk,” said Coulson. “It happens even with electric car companies. With small companies, we need to build markets to fit .”


Debra BorchardtDebra BorchardtJanuary 29, 2018
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5min47671

HempAmericana Inc. (HMPQ) got the skull and crossbones flag after being flagged by the OTC Markets Group for unusual trading activity, potentially among other factors, and labeled with the Caveat Emptor classification. A true penny stock, the shares shot from one cent to three cents in one day. The company has reported no revenue but is valued at $42 million according to the OTC Marketplace.

The company’s CEO Salvador Rosillo sent a letter to shareholders saying, “We understand that this is a safety measure taken by the OTC designed as a reaction to specific markers including but not limited to remarkable stock price behavior, and its intentions are to protect the investing public. We fully support all practices that safeguard the interests of investors and protect the integrity of our public markets.”

He went on to say, “While we are excited by the recent increase in liquidity and interest by an apparent range of new investors in shares of HMPQ stock, potentially including larger financial institutions, we are aware of no explanation for the dramatic rise in interest and liquidity beyond that of simply an increasing recognition of the Company’s efforts to drive future value for shareholders. We have been actively pursuing a range of grass-roots marketing pathways, including magazines and similar outlets, to drive further value to shareholders as part of a robust effort to drive growth for the Company.”

Paid Promotions

The company has paid $71,000 to OTC Tip Reporter and $71,000 to Stock Prophet to promote the company through the end of 2017. Buzz Stocks was also paid $71,000 for the same time period. In addition to these outlets, Epicstockpicks.com was compensated $20,000 cash via bank wire by a third party, Awarness Consulting Network LLC for a one-day HempAmericana Inc. promotion.

The list of promotions continues…….PennyStockGeneral.com was compensated $3,000 via electronic transfer from a non-affiliated third party for the profile of HMPQ. ShiznitStocks.com was compensated $3,000 via electronic transfer from a non-affiliated third party for the profile of HMPQ. ValueStockPick.com is a web property owned by Brilliant Innovators and was also compensated $6,000 cash via bank wire by a Sand Stone Marketing LLC  to conduct investor relations advertising and marketing for HMPQ. This is not the complete list of promotions.

CEO Response

Rosillo continued, “We will be in close communication with the OTC Markets Group going forward, and stand ready to provide any aid necessary in assisting them with any questions that may arise due to our increase in liquidly.

 

Several days ago, we issued a press release announcing final construction activities at the facility, with major equipment deliveries on schedule and expected in coming days. This includes the delivery of our new 200-liter supercritical CO2 CBD extraction machine – the highest-capacity state-of-the-art CBD extraction machine produced by the manufacturer. Full-capacity production is scheduled to start shortly thereafter.

As it happens, our timing apparently could not be better. Growth in the CBD oil space is now widely projected to outpace that of the broader cannabis-related market segment, which is itself widely projected to outpace nearly every other sector on the planet over the next six quarters.

We will continue to remain passionately committed to realizing our vision of becoming the leading high-capacity CBD oil producer in business today. Further updates will be forthcoming shortly.”

The OTC Position

OTC Markets Group monitors for potential promotional activity relating to securities trading on our markets. We review for anonymous paid promotions, possible connections to bad actors, and evaluate the promotions potential impact on trading.



About Us

The Green Market Report focuses on the financial news of the rapidly growing cannabis industry. Our target approach filters out the daily noise and does a deep dive into the financial, business and economic side of the cannabis industry. Our team is cultivating the industry’s critical news into one source and providing open source insights and data analysis


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Green Market Report’s Marijuana Money May 22, 2020

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$GGBXF ⁦@GG_Brands⁩ Defaults On Debentures, Heads To

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