Maricann's $70M financing in limbo, directors resign amid OSC investigation
TORONTO - Medical cannabis company Maricann Group Inc.'s chairman and a board director have stepped down and its recent $70 million financing is in limbo as Canada's biggest securities regulator conducts a review of certain trades by its directors.
The announcements Wednesday sent shares of the company, which produces and distributes medical marijuana, down as much as 30 per cent on the Canadian Securities Exchange to $1.70 per share from Tuesday's closing price of $2.49. The stock price sat at $1.91 in late morning trading.
Maricann has not received an official notice of termination for the bought-deal offering announced last month, but said it has been advised orally by the underwriters that they are not prepared to proceed.
The company, based in Toronto and Munich, also announced that its chairman Neil Tabatznik and Raymond Stone, a director, have resigned from the company's board. Paul Pathak has been appointed interim chairman.
The moves come as Maricann says the Ontario Securities Commission is reviewing the timing and reporting of certain trades of shares owned or controlled by Stone and Tabatznik and Eric Silver.
It added that the regulator has also told the company in a letter dated Feb. 8 that Maricann chief executive Ben Ward is the subject of an investigation into his activities while he was CEO of Canadian Cannabis Corp., a wholly unrelated company.
"Prior to this, the Company was unaware of the matter," Maricann said in a statement Wednesday. "The Company is unaware of any facts that could reasonably lead it to conclude that this investigation has had, or will have, any impact on the ability of Mr. Ward to properly and effectively carry out his duties as CEO or director of the Company."
The company said that OSC staff have advised that they are unable to provide any further information at this time. It added that Stone, Tabatznik, Silver and Ward have advised Maricann that they are fully co-operating with the investigation.
An OSC spokeswoman said Wednesday that the regulator has an active investigation, and is not in a position to comment further.
Maricann's board of directors has established a special committee which has full authority to review these trades and the OSC investigation involving Ward.
“We have heard from many significant shareholders of the Company about their concerns with these matters, and we share them," said Pathak, speaking on behalf of the committee. "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.”
Companies in this story: (CSE:MARI)