Dec 22, 2014 - 8:11 PM EST
Last Updated: Dec 23, 2014 - 9:16 AM EST
Serious questions are swirling around CEN Biotech Inc., the penny-stock company introduced with great fanfare last January as this area’s first big entry into Canada’s newly corporatized #$%$ sector.
“I’ve been very concerned recently … there’s some strange things with that company,” said Alan Brochstein, founder of 420 Investor, a subscription-based online community that keeps tabs on the corporate marijuana sector for investors.
In a phone interview with The Star from his Houston, Texas, base, Brochstein described as troubling that, while touting his firm’s stock to potential investors, CEN Biotech CEO Bill Chaaban has been selling some of his own stock and pulling out millions of dollars.
A lengthy article in Saturday’s Globe and Mail newspaper reported Chaaban had unloaded more than 71 million shares in a series of transactions this year that resulted in a personal gain of more than $4.6 million.
Brochstein, who has been active in the financial industry since 1986 and involved in stock trading since 1978, told The Star that Chaaban had advised him in an interview early this year that he would be “selling a small amount of shares.” But as the selling continued through the summer Brochstein said he felt “it got to be a bit of a problem – how much is too much?”
More troubling for some would be the company advising potential investors – falsely – that it had entered into a “partnership” with Health Canada with its proposed Lakeshore #$%$ growing operation.
Another “red flag” for Brochstein was CEN Biotech advising the investment community earlier this year that its licence to grow pot was “imminent.”
Not only does Health Canada insist it does not offer partnerships with potential licensed producers, but CEN Biotech has yet to obtain federal approval to grow marijuana, let alone sell it. The company also took a major step backwards last month over municipal zoning at its nearly completed high-security Lakeshore facility.
Sentiment: Strong Sell