Last week, Canadian licensed cannabis producer Supreme Pharma (CSE: SL) (OTC: SPRWF), which operates the 7 Acres hybrid greenhouse cultivation facility in Ontario, announced the closing of the final tranche of its almost $15mm private placement capital raise. Later in the week, it filed a Form 9, which listed all of the investors in the third tranche by name and the amount purchased, with 163 people and entities participating in the round. In the first and second tranches in June and July, there were 97 investors listed in the filings, though there were some investors that participated in multiple tranches.
One interesting aspect was the number of insider investors. Chairman Michael La Brier, who was previously an investor when he took on the role in April, added 5mm units ($2mm), buying 2.5mm each in the first and third tranches through an entity called Hunters Glen Investments Inc. Other directors, members of management and employees included CEO John Fowler (50K units in first tranche), CFO Navdeep Dhaliwal (50K units), and employees Ramana Davloor, who heads Quality Assurance (750K units), Cindy Weidelich (75K units), Keith Cleveland (50K units), Matt Rogge (31,250 units) and Zach Stadnyk (25K units). The estate of Margit Herburger (wife of Peter Herburger and mother of Sarah Herburger, both officers) bought 250K units.
Some outside investors of note included attorney Hugo Alves and his employer, law firm Bennett Jones, who bought 275K units and 250K units, respectively, in the first and third tranches. Alves, who recently contributed an excellent analysis of the industry here, is a leading industry adviser. Former Supreme CEO David Stadnyk bought 250K units, while former director George Tsafalas purchased 100K units. PharmaCan’s former Chairman Lorne Gertner and former CEO Paul Rosen bought 62,500 units and 37,500 units, respectively. There were several large buyers, most of which used holding companies, but one that stood out was 2.16mm units purchased by investment bank Canaccord Genuity.
Chuck Rifici, co-founder and former CEO of Tweed, Inc. (now Canopy Growth) and Liberal Party CFO from 2011 until this past June, has been actively investing in the U.S. through his Nesta Holdings, but he has not had any publicly disclosed purchases of Canadian LPs. In mid-August, he tweeted his pending visit to the 7 Acres facility:
He clearly liked what he saw, as he ended up buying 2mm units, making an investment of $800K. He was also paid a finders fee for introducing other investors that amounted to 28,125 warrants. Rifici responded to our inquiry regarding his investment:
I’m a big believer in the hybrid greenhouse concept and believe in the aggregate success of the industry.
Chuck Rifici, touring Supreme’s 7 Acres facility
Finally, perhaps the most interesting buyer of Supreme’s private placement was John Baird, who purchased a total of 375K units ($150K) in the second and third tranches. Baird has been a leader in the Conservative Party, serving most recently as Minister of Foreign Affairs from 2011-2015. In 2013, when PM Justin Trudeau, then Liberal Party Leader, went public with his recent cannabis consumption while serving as a member of Parliament, Baird told reporters that he had stayed away after having seen a U.S. Supreme Court nominee (Douglas Ginsburg in 1987) withdraw after disclosing his prior use of cannabis in college. Baird is an adviser to Bennett Jones, which, as discussed above, invested as well.
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Based in Houston, Alan leverages his experience as founder of online communities 420 Investor, the first and still largest due diligence platform focused on the publicly-traded stocks in the cannabis industry. With his extensive network in the cannabis community, Alan continues to find new ways to connect the industry and facilitate its sustainable growth. At New Cannabis Ventures, he is responsible for content development and strategic alliances. Before shifting his focus to the cannabis industry in early 2013, Alan, who began his career on Wall Street in 1986, worked as an independent research analyst following over two decades in research and portfolio management. A prolific writer, with over 650 articles published since 2007 at Seeking Alpha, where he has 70,000 followers, Alan is a frequent speaker at industry conferences and a frequent source to the media, including the NY Times, the Wall Street Journal, Fox Business, and Bloomberg TV.
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