Cannabis crowdfunding platform Juicy Fields collapsed earlier this month, siphoning millions in investments from its crypto wallet. The company has now released a statement saying it intends to refund investors.
Investors are currently millions out of pocket after Juicy Fields left “eGrowers” across the world unable to access assets they held on the company’s site.
Earlier in July, Germany’s Federal Financial Supervisory Authority (BaFin) prohibited Juicy Holdings B.V. from offering capital investments in the form of investments in cannabis plants to the public due to a violation of the German Capital Investment Act. Juicy Fields failed to provide a required prospectus and remove its products from sale, subsequently receiving a fine of €1m from BaFin.
A number of Juicy Fields’ staff went on strike after failing to receive wages, leading to investors – who paid their investments in either fiat or the cryptocurrencies Bitcoin, Ethereum or Tether – attempting to recover their funds, only to find they were blocked out of their accounts. In a letter seen by Cannabis Wealth, former CEO, Willen van der Merwe, claims that suggested technical changes led to the shut down of the site, which could be back up and running by August.
Former employees, including Daniel Guaci, who says he has received death threats over the situation, have been dissociating themselves from the company. Others who were identified on the Juicy Fields website as team members, including Thomas Steiger, Stefan Graf van Luxburg, Birgit-Elisabeth Neumann and Dr Robert Muller, have threatened to take legal action against the company.
It is currently not clear who is heading the company, however, leaked documents allege three men with Russian passports, Paul Bergolts, Vasily Kandinksi and Alex Vaimer, are the owners.
All of Juicy Fields’ social media accounts and official Telegram channels have been deleted, however, other unofficial Juicy Fields channels have been established by investors discussing the matter. One investor has claimed that the company has ruined families and changed lives, whilst another has rumoured that an individual had taken their life after losing access to their assets.
The Juicy Fields eGrowers are now organising to launch a collective lawsuit against the company and have created a petition demanding communications from the Juicy Fields team.
Juicy Fields yesterday released a statement claiming the company is initiating a process to refund investors.
The company has stated that it was approached by a man named Frederich Graf von Luxburg who “presented an elaborate proposal to not only deal with the BaFin situation that the company faced but to also assist us with the preparation of a prospectus as per BaFin requirements in order for JuicyFields to become compliant with regulatory guidelines in Germany.”
According to the founders, Graf von Luxburg charged Juicy Fields between €100,000 and €300,000 per month for his legal services, stating that it would be necessary to register JuicyFields in the Netherlands, which he did, under the name Juicy Holdings B.V..
Dr Robert Muller was appointed as the single director and board member of this company, allege the Juicy Fields team, who say they were never added to the list of directors and board members.
The founders stated: “Von Luxburg then proceeded to change the name of one of his own Swiss-registered companies to Juicy Fields AG for the purpose of holding 100 per cent of the shares of the Netherlands JuicyFields company in the name of this Swiss company. In the Swiss company, von Luxburg appointed his younger brother Stefan Graf von Luxburg and the same Dr Muller who was acting as sole director and board member of the Netherlands company, as the only two board members and directors of Juicy Fields AG in Switzerland.
“This was clearly, in hindsight, a deliberate action by von Luxburg, to structure a takeover of the JuicyFields platform from its founders and developers, who had started the business originally in Germany. All of this information is in public records and can be verified with company house both in the Netherlands and in Switzerland.”
The team claims that von Luxburg attempted to take over the company bank accounts in Cyprus without the knowledge or consent of the founders of the JuicyFields platform, leading to the decision to freeze all operations.
The team stated: “The decision to suspend all business activities has unfortunately damaged the reputation of JuicyFields immensely, especially due to the fact that a lot of speculation that the company has been running a Ponzi scheme has done the rounds.
“This is extremely far removed from the truth. For two years, JuicyFields has operated properly and our clients, eGrowers and financial service providers have never had reason to complain about our performance on our business. We have also only used properly licensed financial institutions through which to conduct the Juicy Fields business operations.
“The attempts by von Luxburg to illegally take control of the accounts at these financial institutions has obviously caused these financial institutions to suspend all of our operating accounts. We are currently cooperating fully with these financial institutions.
“The problem with having to request financial institutions to suspend and freeze monies in our accounts as a method to safeguard against third party theft, is that our business operations are also immobilised. In all cases where a financial institution has suspended or frozen an account, the financial institution is obligated to notify the financial intelligence unit (FIU) of its member state and these accounts can only be unfrozen once the FIU has concluded their investigations.”
Juicy Fields has stated that the company will now begin a formal process to refund capital investments to all affected eGrowers who have legally invested funds with JuicyFields, stating that information on this process will soon be released.
Additionally, Juicy fields has stated it still has the option to launch in September, with its planned new platform, and to offer existing eGrowers the opportunity to continue doing business under the new platform.
According to the statement, further information will be expected throughout August.
Curaleaf partnership to build platform for German recreational market
The company has entered into a strategic partnership with Germany’s Four 20 Pharma.
Curaleaf has acquired a 55 per cent stake in Four 20 Pharma – a fully EU-GMP and GDP licensed German producer and distributor of medical cannabis with its own product line.
Germany currently represents the largest medical cannabis market in Europe, with a total addressable market of over €200m (~£m) in 2022. This is expected to grow to nearly €1bn by the end of 2024 with the expected legalisation of recreational cannabis, expected to begin in late 2023 or early 2024.
Four 20 Pharma is one of the largest cannabis operators in Germany, with a greater than 10 per cent market share.
The partnership creates a strategic pathway for Curaleaf to acquire complete control of Four 20 Pharma within two years of the commencement of adult use in Germany. Curleaf has stated that the partnership also ensures alignment between Curaleaf and Four 20 Pharma’s current management team to rapidly build a best-in-class German business and a strong platform for Germany’s eventual adult use market.
Curaleaf executive chairman, Boris Jordan, commented: “By partnering with Four20 Pharma, Curaleaf’s European business will immediately gain additional critical mass and be in a superior position to capitalise on the accelerating trends in the European cannabis market.
“The opportunity in Europe cannot be understated, and Curaleaf is uniquely differentiated from other US MSOs via our already significant presence as the largest and most licensed cannabis company in Europe.
“With cultivation facilities in Portugal, manufacturing facilities in Spain and UK, rapidly growing patient numbers across Europe, particularly in the UK, Curaleaf serves the entire legal cannabis ecosystem and is also poised to capitalise on the adult use opportunity as regulation starts to unlock.
“This strategic transaction further underscores our aspiration to be the major player in the European market and the leading global cannabis company.”
President of Curaleaf International, Miles Worne, said: “Four 20 Pharma is a leading German distributor with a branded product that consumers love. They’ve captured significant market share in Germany by sourcing product from top EU-GMP certified suppliers around the world and building strong connections with German medical consumers by providing the highest quality flower in a namesake branded offering.
“As such, Four 20 Pharma is uniquely positioned to capitalise on Germany’s conversion from a medical to an adult use market and we’re thrilled to be partnering with their talented management team.”
Managing Partner of Four 20 Pharma, Torsten Greif, commented: “We have been exploring possible partners to stake our claim in the future German and European cannabis markets, and in Curaleaf we know we’ve found the undisputed leader and the best partner.
“From the beginning of our conversations, it was clear that they supported our strategic vision and respected our autonomy and entrepreneurial approach. Having full access to the tremendous knowledge and assets of the Curaleaf team will accelerate our future growth projects and help drive our company to the next level.”
Managing partner of Four 20 Pharma, Thomas Schatton, added: “Curaleaf shares our values of customer dedication and commitment to product quality, and we are incredibly excited about our future together.
“The team at Four 20 are thrilled to be able to leverage Curaleaf’s proven R&D expertise to help us continue delivering the best quality products to our medical patients and the promising future market.”
MGC Pharma receives first tranche of funding under new $10m financing facility
The financing facility will fund the execution of MGC Pharma’s business commercialisation strategy in the UK and US.
MGC Pharmaceuticals has confirmed it has received the first funding tranche of US$1.2m under a new US$10 million financing facility with Mercer Street Global Opportunity Fund.
The injection of funding will be used to further MGC Pharma’s business strategy, focused primarily on developing revenue growth through its partnerships with Sciensus Rare in the UK and Europe and AMC in the US.
The first portion of funding has been received in full and MGC Pharma will now issue 1.32m of convertible notes with a face value of US$1.00 each to Mercer Street. The company will also issue 21,511,545 fully paid ordinary shares to Mercer as part of the agreement.
The US$10m financing facility provides MGC Pharma with access to significant capital to fund the execution of its business commercialisation strategy in the UK and US as well as advance regulatory approvals for the company’s proprietary products in an effort to drive revenue growth, assist in the rollout of the ZAM App and provide funding for the group’s general corporate expenses.
The company will continue to implement “significant” non-revenue driving cost reductions within its operations, including the delay of non-core clinical trials.
Roby Zomer, co-founder and managing director of MGC Pharma, commented: “Mercer’s new US$10m finance facility provides the company with access to funding for MGC Pharma to continue to execute its business strategy of opening up key strategic markets over the next six months. During this period the business strategy will focus primarily on generating revenue growth through our existing relationships with Sciensus Rare in the UK and Europe, and AMC in the USA.
“In addition to its sales growth strategy, MGC is very excited about the potential value that the recent 40 per cent acquisition of the ZAM medical data collection App and its associated machine learning algorithm bring to the company.
“This investment is not only aimed at reducing R&D costs and providing the company with critical proprietary clinical data in the future but also provides the MGC with the potential for a future additional revenue stream and a value-creating asset on the back of the software’s successful implementation and rollout.”
The new US$10m financing facility fully funds MGC Pharma’s current business plan, the company said, and replaces the unused A$9.25 million of the previous funding facility established in September 2021.
Love Hemp sees sales drop by 16%, expects revenues of £3.6m
Love Hemp Group has stated it is expecting to report total revenues of £3.6m for the financial year ending 30 June 2022, which it says represents revenues slightly ahead of management expectations.
The lower than expected financing earlier this year has resulted in significant reductions in marketing programmes, says Love Hemp. However, the company still experienced sales growth during the second half of the year.
The company’s revenue continues to be UK-centric with year-on-year growth delivered in major retail stores, showing revenue of £2.15m in FY22 up 19 per cent, compared to £1.78m in FY21.
Direct to Consumer (DTC) sales continue to be slow via the company’s own online channels, lovehemp.com and cbdoilsuk.com but have generated 7437 new customers. The company has stated that these sales represent 26 per cent of total revenue, down from a 59 per cent share of total revenue compared in FY21, with a new head of digital commerce having been appointed to help grow DTC sales.
However, it has also highlighted that it has sold 233,987 units, up 19 per cent from last year.
This year, Love Hemp had all 34 products added to the Novel Foods Register. As a result, it has agreed new major retail listings and anticipates launching a range of its products in these new stores and respective online platforms in Q4 of 2022.
Additionally, the company has advanced discussions with a number of other major retailers interested in stocking Love Hemp products.
Tony Calamita, CEO commented; “I am delighted that we have continued to expand our footprint with greater distribution into major retail stores and delivered record sales of product units so more consumers than ever are benefiting from our products.
“This has been achieved whilst undertaking a significant operational review and I am confident this growth will continue.
“The company plans to make Love Hemp more visible internationally and sales overseas provides a significant opportunity in the future. We are a dynamic and passionate brand that after some challenges is once again on a growth curve with the most powerful and influential brand partnerships in the sector. Now it is our time to really capitalise on the opportunity.”
In December 2021 Love Hemp was also awarded ‘Leading CBD brand 2021’ in the Commercial Cannabis awards organised by Global Health and Pharma. Love Hemp is also a nominated finalist for ‘Most Loved CBD brand’ in the World CBD awards due to take place in October 2022.
Over the next year, Love Hemp plans to invest further in product development and release numerous new products in both ingestible and topical formats.
- Curaleaf partnership to build platform for German recreational market
- Tenacious Labs acquires CBD pet company Rover’s Wellness
- Khiron announces opening of first Zerenia medical cannabis clinic in Brazil
- MGC Pharma receives first tranche of funding under new $10m financing facility
- Akanda and Cansativa to supply German patients with cannabis flower