There was never an intent to defraud anyone by selling shares in the Dauphin, Man., area in support of the hemp industry, says a member of the Parkland Industrial Hemp Growers Co-op.
Chris Dzisiak, who plans to grow his second crop of hemp this year, suggested last week that an oversight was to blame for the investigation launched by the Manitoba Securities Commission.
“We’d left it up to the lawyers to set it up, and it seems that some place somebody screwed it up. It wasn’t done right, according to the securities commission.”
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The commission began investigating this month after doubts were raised by some people who were asked to invest money in one or more numbered Manitoba companies. The shares were not qualified for sale under the Securities Act.
Dzisiak said the hemp growers co-op was not selling the shares. However, the co-op did accept names from people interested in investing, he said. It provided a place where people could sign forms of acknowledgement to buy shares in the numbered companies.
The hemp growers co-op felt that what it was doing was legal and above board, Dzisiak said. He admitted that they may have been naive in that thinking.
“We were middlemen, standing with one foot in hot water and not knowing it.”
The shares were being sold by Consolidated Growers and Processors, said Dzisiak. The money was to be managed by numbered companies that would be run by the shareholders. The shareholders would have the final say about how their money was invested.
One scenario was that the money would be used to buy shares in CGP, which said last month it will build a $25 million hemp processing facility at Dauphin. The facility would have processing plants.
But Dzisiak said money raised from the shares was not meant to fund construction of that project.
People who bought shares were also made aware that they were investing in a high risk proposition, said Dzisiak.
“This isn’t for the faint of heart. This is for money you have that you’re fully prepared to lose. That’s the sorts of things people were told.”
The securities commission was trying to learn last week who orchestrated the sale of shares and for what the money was intended. It was not known last week whether a new share offering might be launched in the Dauphin area for the same purpose.
There was no hint that the investigation might jeopardize plans for the hemp processing facility at Dauphin. Hemp fibre and seed will be processed there at two separate plants, expected to be ready in the fall of 2000.
The City of Dauphin had no involvement with the share offering, said mayor Bill Nicholson. However, the community remains in support of the facility. Efforts are under way to get a temporary processing plant in place this year, Nicholson said.
“It’s going to be good for the community,” said the mayor, referring to CGP’s plans to build at Dauphin. “We want to get them here and to get the jobs.”
Last year marked the first time in six decades that industrial hemp was grown legally in Canada. The Dauphin area was at the forefront of communities pursuing the crop as another farm diversification.
Big news
Dauphin was abuzz last month when it was announced CGP would build its hemp processing plants there. Last week, talk was again focused on hemp, as word spread along coffee row that the securities commission was investigating.
Con Artibise, a Dauphin resident, was watching from the sidelines. He suggested that media coverage of the investigation was much ado about nothing.
“The sense is that someone jumped the gun a little – sort of tried to beat the system and the system caught up to them.
“We all do that. I run stop signs every once in a while, too.”
