Shares of Maricann, a licensed Canadian medical marijuana producer, dropped to a low of CA$1.70 on Feb. 28 and closed at CA$1.97, down by 21 percentage points on the day, after the company announced that a $70 million financing deal has been scratched as it faces a probe from the Ontario Securities Commission (OSC), CBC News reports.
Underwriters for a group of investment banks verbally told Maricann they will no longer move forward on a share sale or bought deal that would have raised the money for the company, and several executives are being investigated by the OSC for the “timing and reporting” of certain trades of shares that were owned or controlled by directors Neil Tabatznik, Raymond Stone and Eric Silver, according to CBC News. Both Tabatznik and Stone have resigned, and Maricann has appointed director Paul Pathak as interim chairman of its board.
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The company has also indicated that the OSC started investigating Maricann’s CEO, Ben Ward, for activities that occurred while he was head of another marijuana firm, Canadian Cannabis Corp., CBC News reports. Ward was the head of Canadian Cannabis from 2013 to 2016, and is cooperating with the investigation, CBC News says.
Maricann has created a special committee, which includes an independent law firm, to review the trades in order to address the concerns raised by the OSC investigation, and its shares were temporarily halted from trading Feb. 27, although they resumed Feb. 28, according to the CBC News report.
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