CEN Biotech – Dopechef Media

Health Canada checks on CEN Biotech

Dopechef — Wed, 14 Jan 2015 19:20:51 +0000

Public told to contact police with concerns over marijuana firm

The car of a security guard sits inside the gate at CEN Biotech’s main facility in Lakeshore, Ontario, Saturday, December 6, 2014.
(Geoff Robins For The Globe and Mail)

GRANT ROBERTSON

The Globe and Mail

Health Canada is instructing anyone with concerns about CEN Biotech – the company seeking to become the country’s largest medical marijuana producer – to contact police or securities regulators.

The unusual request comes as allegations of misrepresentation, stock manipulation and falsified documents swirl around the company and its top executive.

Health Canada said it can’t comment on the status of CEN’s licence application, but a department official said the RCMP and other regulators should be notified of concerns, adding that “we work closely with the RCMP.”

CEN Biotech, the Canadian subsidiary of Michigan-based Creative Edge Nutrition, has applied to build a massive marijuana growing facility in Lakeshore, Ont., just east of Windsor. The company wants to sell 600,000 kilograms of the drug a year, making it by far the largest in the new sector.

But the company is now under a cloud of suspicion for allegedly issuing false news releases, suspect signatures on documents, and making misleading statements about partnerships and endorsements from Health Canada.

The brewing scandal has become an embarrassment for Health Canada, and for Health Minister Rona Ambrose, since the company has made it to the final stage of approvals with the department.

Multiple misrepresentations helped drive the market value of Creative Edge Nutrition, a penny stock traded on the loosely regulated U.S. over-the-counter market, to more than $350-million (U.S.) this year. But as chief executive officer Bill Chaaban was touting the stock to investors using false claims involving Health Canada, he was quietly selling 71-million shares and pocketing more than $4.6-million in proceeds.

Health Canada has asked those with evidence of impropriety to also contact securities regulators. Due to a loophole in Ontario securities regulations, Creative Edge is beyond the reach of the Ontario Securities Commission or any other Canadian body. It instead falls under the jurisdiction of the U.S. Securities and Exchange Commission.

A spokeswoman for the SEC in Washington said the agency won’t comment on whether or not it is investigating a company. However, two sources have told The Globe and Mail they have been in touch with investigators inside the SEC regarding the company.

Health Canada appears ill-equipped to deal with the problem on its own. Officials with the department have demonstrated a lack of understanding on the matter in conversations with The Globe, and Ms. Ambrose’s office has indicated little comprehension of the severity of the allegations against its biggest applicant.

Now, a new case of suspicious-looking documents produced by the company threatens to make the situation more problematic.

An anonymous poster on an Internet message board recently produced documents filed by the company to regulators bearing Mr. Chaaban’s signature. A document dated Dec. 29 contains a signature that is distinctly different than others filed by the CEO in 2014. The Globe and Mail subsequently obtained the documents, which are available through filings on Bloomberg and the appearance of the signatures raises questions about their validity. Calls and e-mails to Mr. Chaaban for comment have not been returned.

Health Canada says it performs “rigorous” background checks on people and companies seeking to become licenced. But there are questions as to how much diligence the government has done on its biggest applicant. A federal licence can be worth $70-million (Canadian), based on surges in market value seen in other publicly traded stocks once the permit is granted.

Health Canada’s checks on CEN Biotech appear to have missed a trail of concerning conduct and legal problems, including two people associated with the company who have been charged by the SEC for alleged fraud. One of them was fined, while the other is still before the courts in the U.S. Other misrepresentations by the company – through news releases and public statements – suggest questionable ethical standards at CEN Biotech have been mostly ignored by Health Canada.

After the Globe and Mail published an article in December detailing those problems, the investor relations firm representing CEN Biotech, New York-based 5WPR, severed ties with the company, saying it had not approved, nor was aware, of at least two news releases issued under its name.

Ms. Ambrose’s office is trying to distance itself from the brewing scandal. Her spokesman told the Globe and Mail the minister has no role in granting or refusing licences. However, Health Canada has rejected hundreds of licence applications so far. The Globe and Mail obtained 129 of these refusal letters through Access to Information. On at least 102 of the letters, the Health Minister is listed as the reason for rejecting the licence. “The minister must refuse to issue a licence for this application,” the letters state.

One letter deals directly with a company misrepresenting itself. “The Minister has reasonable grounds to believe that false or misleading information,” was issued by the applicant, says the March 19 letter to a B.C. company.

In July, Mr. Chaaban told investors he had a “partnership” with Health Canada, among other claims. Though such claims were invented, Health Canada did not step in. Ms. Ambrose, through her spokesman, has declined requests for comment.

Article source The Globe & Mail

$12M medical marijuana investment

Dopechef — Thu, 09 Jan 2014 08:55:44 +0000

Company invests $12M to grow medical marijuana in Lakeshore (with video)

A group effort ended with the announcement of a $12-million investment by CEN Biotech for the launch of a controlled environment for the production of doctor-prescribed marijuana. Lakeshore Mayor Tom Bain, left, Joseph Byrne, CEN Biotech investor, Bill Chaaban, CEN Biotech president, Sandra Pupatello, CEO WindsorEssex Economic Development Corp., and Don Strilchuck, CEN Biotech corporate security, at the agribusiness operations on North Rear Road Tuesday, January 7, 2014. (NICK BRANCACCIO/The Windsor Star)

Jan 07, 2014 – 10:21 AM EST
Last Updated: Jan 07, 2014 – 5:17 PM EST

LAKESHORE — The birth of a new industry for the region was announced Tuesday with a $12-million investment in a high-security facility that could employ 50 people by the end of the year to grow medical marijuana.

“We stand ready to meet every expectation that Health Canada has for the safe, highly controlled, professional management of this medicinal tool for doctors,” said Joe Byrne, board chairman of the WindsorEssex Economic Development Corporation and an investor in CEN Biotech, a subsidiary of Michigan-based Creative Edge Nutrition.

Leasing a 27,000-square-foot barn a half-minute’s drive from the Essex County OPP headquarters, CEN Biotech president Bill Chaaban said the plan is to add a 58,000-square-foot growing facility in the spring and have the operation “up and running seven months from now.”

“CEN Biotech is the first out of the gate, but I expect more,” WEEDC CEO Sandra Pupatello told The Star. She said she can’t divulge details, but last month another company, Startup ECGreen, received rezoning approval from Tecumseh town council to set up a similar but smaller commercial grow op in the Oldcastle Business Park.

A Health Canada spokeswoman cautioned, however, that there are more than 380 applications currently being processed, with only three — two in the Toronto area and one in Saskatchewan — licensed so far to grow, package and sell marijuana to registered patients.

Pupatello said CEN Biotech recently obtained a “ready-to-build” letter from Health Canada, which she referred to as a “critical step in the very grueling process” towards being licensed by the federal agency.

Pupatello, who was part of the official announcement at the Jim Shaban farm off Manning Road just south of Highway 401, said CEN Biotech is part of a new growth sector in the local economy, producing goods for the “life sciences” market.

“Walk into any grocery store or pharmacy — natural products are expanding,” Pupatello told The Star. She also said a growing number of doctors are recognizing the benefits and prescribing marijuana to help treat the effects of everything from glaucoma and nerve pain to chemo-induced nausea, seizures and multiple sclerosis.

Also at the news conference was Donald Strilchuck, who retired as a detective after 33 years with the Windsor Police Service and who was introduced as head of corporate security for CEN Biotech.

Byrne, a lawyer, businessman and former town and county politician, said security at the Lakeshore facility will resemble that of a federal penitentiary, with double perimeter fencing, 24/7 on- and off-site monitoring including night-vision cameras, as well as guards, including two former city police officers and an off-duty uniformed OPP officer.

The business proponents have received RCMP clearance, and nobody gets inside without criminal checks, according to the principals.

“It’s just one more crop … with special rules,” said Chaaban. Upwards of 40,000 marijuana plants will be grown hydroponically from seed, with up to 1.3 million pounds of medical marijuana to be produced annually, subject to demand.

The product, all electronically tracked, is grown, harvested, dried and packaged on-site and then sent by courier to the patient/client.

“It’s interesting to note that Windsor-Essex might indeed be the prime location to marry high level security with agribusiness expertise,” said Pupatello.

Following growing crime and fire hazard concerns, Health Canada set an April 1 deadline for the switch from thousands of individual personal-use growers of medical marijuana to a more regulated and corporate-controlled regime. As of the end of 2012, there were 13,362 registered medical marijuana users in B.C. and 8,617 in Ontario, the top two provinces.

In a Forbes profile last week, Creative Edge Nutrition, an American nutritional supplement company, indicated big potential revenues, with current medical marijuana users paying up to $6 per gram, while the production cost to CEN Biotech was anticipated to cost up to $1 per gram.

Chaaban sees current export potential to such countries as The Netherlands, Uruguay and Israel, while there’s even a potential to branch out locally into commercial hemp production. Given the “onerous” requirements and “hassle” of establishing a safe and secure supply of medical marijuana, Pupatello said establishing such a network here could provide an excellent opportunity for Windsor-Essex County to cash in on becoming a supplier to other jurisdictions.

“This is an opportunity to start a brand new industry,” said Byrne. “Our community houses the continent’s most robust, secure border environment, and as a hub for agriculture expertise, our region boasts the country’s best hub for horticulture,” he said.

“Look at how the greenhouse industry has just exploded in the south of the county … we hope to see this explode too,” Lakeshore mayor and county Warden Tom Bain said at Tuesday’s announcement. “We know we have to diversify,” he said, citing the recent Leamington Heinz factory closure announcement.

dschmidt@windsorstar.com or on Twitter @schmidtcity

Investor On Lakeshore’s Medical Marijuana Plant (click above image for video)

A group effort ended with the announcement of a $12-million investment by CEN Biotech for the launch of a controlled environment for the production of doctor-prescribed marijuana. Sam Alawieh, left, CEN Biotech vice-president of operations, Bill Chaagan, CEN Biotech president, farm owner Jim Shaban, Jospeh Byrne, CEN Biotech investor, and Sandra Pupatello, CEO WindsorEssex Economic Development Corp., at the future agribusiness operations on North Rear Road Tuesday, January 7, 2014. (NICK BRANCACCIO/The Windsor Star)

ARTICLE SOURCE Windsor Star blog

$12M medical marijuana investment made near Windsor, Ont

CEN Biotech hopes to be up and running in 7 months

CBC News Posted: Jan 07, 2014 10:49 AM ET Last Updated: Jan 08, 2014 8:48 AM ET

Economic development corporation CEO Sandra Pupatello says Windsor-Essex might be the prime location to marry high-level security with agribusiness. (File Photo)

Lakeshore Township has landed a $12-million investment in the medical marijuana field.

CEN Biotech, a subsidiary of Creative Edge Nutrition, will grow and sell medical marijuana at a facility in Lakeshore.

Lana Drouillard, director of marketing and communications for the Windsor Essex Economic Development Corporation, previously told CBC News that CEN Biotech is licensed by Health Canada to produce and sell medical marijuana.

That’s not entirely true. CEN president Bill Chaaban said his company has been granted “a ready-to-build” letter.

The 4 hectare\10.3-acre lot off Manning Road, near the the Essex County OPP detachment at Highway 401, already has a 27,000-square-foot building on site. Chaaban plans to build a 58,000-square-foot facility and enclose the entire site with a four-metre, barbed wire fence.

“It will replicate a federal prison,” Chaaban said.

Once built and secure, Health Canada will conduct a pre-licence inspection and then, if satisfied, issue a licence.

“We’re going to set the [security] standard in the industry,” Chaaban said.

Two retired Windsor police officers will work on site, as will two off-duty OPP officers, paid for by CEN Biotech.

Chaaban expects to employ up to 50 people on site. He said ancillary jobs at an off-site call centre to take orders are also possible.

“We hope to have the facility built by the end of April and be up and running seven months from now,” Chaaban said.

CEN Biotech has applied to hydroponically grow and sell 1.3 million pounds of marijuana each year.

“That’s more than the market will bear right now,” Chaaban said.

So the company has also applied to export pot overseas.

Economic development corporation CEO Sandra Pupatello praised the investment.

“It’s interesting to note that Windsor-Essex might indeed be the prime location to marry high-level security with agribusiness expertise,” Pupatello said in a media release. “Health Canada has moved CEN Biotech one step closer to that reality. We are especially pleased to be here … for an economic development announcement that will benefit the whole region.”

ARTICLE SOURCE CBC.ca