Maricann's $70M financing at risk as underwriters pull support amid OSC review

Canadian cannabis company Maricann Group is in hot water with security regulators amid concerns over trading activity by a pair of its directors.

Maricann confirmed on Wednesday the Ontario Securities Commission is conducting a review of the timing and reporting of certain trades executed by Raymond Stone and Neil Tabatznik ahead of the announcement of a $70-million bought deal financing, which is itself now at risk. Stone and Tabatznik have resigned from their posts, and have told the company they are cooperating with the review.

Maricann also said the underwriters of the deal, which was being led by Eight Capital and Canaccord Genuity, have informed the company orally that they are no longer prepared to proceed with the deal. The company said it has not received an official termination notice.

In addition to the review of Stone and Tabatznik, the OSC is also investigating Maricann Chief Executive Officer Ben Ward in relation to his activities when he was the CEO of Canadian Cannabis Company. Maricann did not offer any details as to what the OSC is investigating, but said he has also informed the company he is cooperating with the OSC.

The OSC’s reviews of trading activity by Stone and Tabatznik and Ward’s previous actions was earlier reported by The Globe and Mail.

In the wake of the regulatory scrutiny, Maricann said its board of directors has established an independent special committed to review both the trading activity of Stone and Tabatznik and the OSC investigation into Ward.

“We have heard from many significant shareholders of the company about their concerns with these matters, and we share them,” said director Paul Pathak in a press release.  

“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.”