Canadian medical cannabis company Maricann Group Inc.’s chairman along with a board member have stepped down amidst a review by the Canadian Securities Exchange of its planned $70 million financing, the Canadian Press reports. The review has put the financing on hold – but it has not been terminated. The company has been advised orally by the underwriters not to proceed with the deal.
The resignations of Chairman Neil Tabatznik and Director Raymond Stone, come as regulators investigate the timing and reporting of certain trades owned or controlled by the pair, along with director Eric Silver. Paul Pathak has been named interim chairman of the board.
The Ontario Securities Commission is also investigating CEO Ben Ward’s activities as CEO of Canadian Cannabis Corp., a wholly unrelated company. In a press release, Maricann indicated it is “unaware of any facts that could reasonably lead it to conclude that this investigation has had, or will have, any impact” on Ward’s ability “to properly and effectively carry out his duties as CEO or director of the company.” The company said Ward is fully cooperating with the investigation. Maricann has convened a special committee to investigate the trades.
“We have heard from many significant shareholders of the company about their concerns with these matters, and we share them. 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.” – Pathak, in a statement
Maricann’s shares were down as much as 30 percent on Wednesday following the report.