Cann Global says it has taken steps to improve its financial transparency following shareholder unrest over commercial relationships with entities related to its founder and former chairman Pnina Feldman.
Chief operating officer Marion Lesaffre said the company has terminated a multimillion dollar arrangement with Australian Gemstone Mining – a private firm owned by Feldman – that had provided a range of services for Cann Global since 2007.
Another arrangement that saw a close relative of Feldman provide marketing services to Cann Global in exchange for payments to Sydney’s Yeshiva Centre has also been terminated, Lesaffre told The Age and the Sydney Morning Herald.
“We have been through a process of reviewing and in many cases replacing some of the company’s advisors and consultants,” Lesaffre told the publications. “We are now confident that the current complement of independent advisors and consultants are delivering a high degree of value to the business.”
The arrangement, which had been disclosed to shareholders, saw Cann pay Australian Gemstone Mining A$14m over 14 years for management, secretariat and other services.
Lesaffre’s remarks followed reports in The Age and SMH last month which detailed a number of financial issues that had troubled shareholders.
Among them was a failure to recover $1.2m from Volcan Australia Corporation, an entity owned by Feldman and her son, Sholom Feldman – who is MD of Cann Global – relating to the transfer of a sapphire mine owned by Cann.
Cann had accounted for the $1.2m as an impaired and unpaid “loan” to Volcan, which is also one of the medicinal cannabis company’s largest shareholders.
Lesaffre said directors were looking to recover the money and had asked its geologists to find ways of monetising the mine.
News of investor frustrations comes at a delicate time for Cann Global with shareholders being asked to approve a proposal to issue 70 million shares to Pnina Feldman following her retirement and to pay the outstanding balance of the services contract with Australian Gemstone Mining.
Shareholder sentiment has not been helped by Cann Global’s poor share performance.
Sholom Feldman told Cannabiz in October that the long-awaited release of its hard-pill medicinal cannabis product in Australia would trigger an upturn in the company’s fortunes.
“I would compare the last few years to growing an orchard,” he said. “It takes a lot of planting trees, a lot of hard work and it takes a number of years before you start seeing the fruit. Success will come.”