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This zoning thing is a point that keeps coming up, unfortunately. I am a shareholder, for the record, and I believe in the potential of what FITX is doing. I consider myself very 'pro' FITX.
Regardless, the Canadian government does not allow for the commercial-scale growing of recreational marijuana, which, in Canada, remains illegal. Furthermore, the Canadian government has not announced any plans to decriminalize recreational marijuana. Marijuana grown in Canada must be for medical purposes in order to be legal. As such, unless I am much mistake (which could be the case), Health Canada treats medical marijuana as a pharmaceutical, and requires that medical marijuana production facilities be considered industrial sites like other pharmaceutical facilities. This is partially the reason for the change in the law, for marijuana production to be regulated in sterile environments so as to reduce or eliminate the risk of drug (buds!) contamination by bacteria, molds, fungi, and other contaminants that could cause harm to patients who use mmj and who are immuno-compromised, such as HIV patients and patients on chemotherapy regimens.
Mr. Chaaban and co. have stressed this aspect of the operation and its place in the development of the facility. For FITX to receive a growing license, the utmost care and attention to detail must be given to create a proper, sterile pharmaceutical production facility. It is not unrealistic to assume that the strict standards and conditions in which medical marijuana may be legally produced in Canada require an industrial zoning categorization. Aside from Tweed's former-Hershey-factory facility (which, as I believe I read on their website, or a related article, is situated next to cattle pastures), has anyone investigated where the other 11 licensed companies are growing, and what kind of zoning they have? I admit I have not.
I also admit that I have not read the MMPR law or HC guidelines in their entirety, and therefore, I admit that my line of reasoning here is speculative. However, as I did in a previous post this afternoon, I will refer to a document that Investanator posted in reply to one of my posts a few days ago:
http://www.citywindsor.ca/cityhall/committeesofcouncil/Standing-Committees/Planning-and-Economic-Development-Standing-Committee/Documents/feb%2010%20item%202_20140130153939.pdf
My relevant follow-up in that post is quoted here:
"Granted, the document is from the Corporation of Windsor, and thus does not represent the municipal conditions of Lakeshore. However, the summary on the law as established by Health Canada is very relevant, because, although it represents Windsor's interpretation of the HC law (or maybe they've been told by relevant authorities to interpret it as such) that medical marihuana facilities must be zoned as industrial, and does not necesarily represent the Lakeshore Municipal authority's views, it is very likely that Lakeshore has adopted the same stance. Furthermore, the minutes from the April 8th Lakeshore Council meeting state the the Director of Community and Development Services (I believe that's Mr. Steve Salmons) has told CEN that they will need to seek "rezoning and site plan approval" from the Town. Therefore, though I hate to do so, [I will admit] that Rolphtonair has been correct all along, and that, technically, CEN Biotech does not have the appropriate zoning requirements to operate a medical marijuana facility in Lakeshore."
As I went on to say in that post, I do not believe that this means FITX will be unsuccessful. I believe that it will be, or, rather, I believe that it can be and hope that it will be. (If anyone cares to read my reasoning as to why I think things will work out for FITX and the zoning, please refer [oddly enough] to post #110420.) However, if I'm even sort of right in my speculation on the zoning issue, then the facility will have to meet HC pharmaceutical specs, which will require an industrial zoning OR some kind of exception added onto the zoning classification of "Agricultural Use - Value Added" under which the facility is currently registered and taxed. This will, of course, mean that at some point, company representatives will need to meet with Lakeshore Municipal officials to discuss the best way to proceed, with regards to rezoning applications, etc. (as Mr. Salmons states in the April 8th document linked above). One very real potential problem (which may have been part of any previous, pre-CEN Biotech, attempts to have the land rezoned) is the relative closeness of residential homes and structures to the site. For that reason, it may be that the zoning issue is resolved by adding an exception onto the current Agriculural zoning status, or rezoning to a different Ag classification. I feel, though, that if the town and county want to do it, and if the site meets the other requirements of the HC law, and if CEN pushes hard enough in the right direction, this issue can be resolved satisfactorily for all relevant parties.
What bothers me most is that, given this line of reasoning, Mr. Chaaban's message posted on Facebook at 11:38 am on April 6th, is rather disconcerting:
[begin quote]
"...you do Not require a permit to grow, harvest and package on agriculturally zoned land. There will be no processing involved. The final product will be picked up by brinks and shipped from canada post."[stop quote]
I mean, surely he realizes that the zoning issue is not merely a construct of ihub message board speculation and dialogue.
However, I am not a lawyer, and I sure as hell am not familiar with Canadian law or the political machinations that drive these and other commercial dealings. It is for certain that Mr. Chaaban understands much better than I the inner workings of the politics involved in making this thing happen (that's his job, after all, and he has accomplished or set in motion much of what he has set out to do with the CEN Biotech subsidiary project, which in my mind has earned him some due respect and some room to continue onward without warranting too much undo bashing or unnecessary questioning of character).
As a side note, there has been some discussion of the cost of the construction, which Mr. Chaaban has estimated at $12,000,000, to the delight of many naysayers who have attempted to cry 'foul' after claiming to have seen or found Lakeshore municipal documents pricing the construction of the new building at $900,000 (I have not seen these documents, but I trust that they exist). However, what said parties have failed to address is the cost of outfitting a sterile lab-like growing environment, or the equipmemt to grow with (which, on a commercial scale, will get pricey with a quickness), or the starter seeds and/or clones, or safety features that any of the buildings being used to grow or process the medicine will require, including extensive fire safety systems, computer networks and equipment, negative pressure seals, etc. (not to mention the cost of skilled labor for these things). Nor have they mentioned the cost of licensing for the tracking software, insurance, nor the price of legal representation, etc. I could spin this point into yarn. The point is that, while there is certainly room for speculative lines of reasoning regarding all of the issues raised, a reduction in fantastical negativity would be a welcome change to a board where genuine, constructive dialogue should encourage investors and interested parties to engage the issues from all sides objectively. This last was not intended as a rebuke to any specific individual, it was merely intended to address a certain tone that occasionally sets in, and which could have very real negative consequences regarding the investors who are here to do well for themselves and their families, many of whom are new and inexperienced, as has been the case during much of the "green rush". Regardless, I very much enjoy the many views I've read here, which have given me new and vital perspectives with which to consider my own investment in FITX. Thanks to all. I'm out for the night.
I think that you're right, that it will likely take longer than originally projected.
Fair to say. I guess we won't know until it happens. But, as others on here have suggested, if Mr. Chaaban and fellow insiders are trying to scam shareholders, they sure are making one hell of an effort so that they can grab a few, or even a few dozen, mil and be spending the rest of their lives looking over their shoulders, or worse. I have to say, if they plan to bail, they are putting forth one very impressive show to cut and run, instead of continuing to build a perfectly legal and legitimate enterprise for which so many have labored, and from which so many, themselves included, stand to gain so much, and riding it to the top (or competitively near the top) of an industry that's just beginning, and which doesn't appear to be going away anytime soon. I respect your opinion, as I suspect it is formed from experience, and if that's the case, I feel your pain. Howver, I've said it before and will again: CEN Biotech is not too big to fail, but it is too big to LET fail. And this story has been so interesting... I myself and going to ride this one out and see what happens, come what may. I will accept the responsibility for risking loss, because this is the most promising pink I've ever followed.
As far as motivation is concerned, the Lakeshore Town Council has plenty. There are jobs at stake for an area that has been rather dependent on the auto industry, and other industries, in Detroit for employment, and has found itself rather economically depressed for a few years now because of those industries' difficulties in the recent past, as well as Detroit's overall economically-disasterous situation. Even if CEN Biotech only hired 20 people, that's 20 people able to pay taxes and provide material needs for 20 families, as well as the taxes that CEN itself would pay out locally. Furthermore, your assertion that the site is not permitted electricity in its current zone category is purely speculation, and is more repetition of an argument from naysayers that has been surfacing here for a while now without any proof. I would direct you to the Minutes from the Council Meeting on Nov. 12, 2012, in which Mr. Salmons submitted notification of CEN Biotech's plans in Lakeshore to the Mayor and Council Members, in which he clearly states that "[t]he site is zoned 'Agricultural Use- Value Added' that provides an accessory use for processing and refining agricultural product to a final retail product." How could the processing and refining of any product, as provided by the zone bylaw, occur without electricity or running water. It's about time to put that particular argument to rest, as it beyond ridiculous.
Actually, this may not be quite right. For the record, I am pro FITX, I am a shareholder with the largest position I can afford, and I am long. However, the link posted below, which was posted by Investanator in a reply a post of mine on April 14th is telling:
http://www.citywindsor.ca/cityhall/committeesofcouncil/Standing-Committees/Planning-and-Economic-Development-Standing-Committee/Documents/feb%2010%20item%202_20140130153939.pdf
Granted, the document is from the Corporation of Windsor, and thus does not represent the municipal conditions of Lakeshore. However, the summary on the law as established by Health Canada is very relevant, because, although it represents Windsor's interpretation of the HC law (or maybe they've been told by relevant authorities to interpret it as such) that medical marihuana facilities must be zoned as industrial, and does not necesarily represent the Lakeshore Municipal authority's views, it is very likely that Lakeshore has adopted the same stance. Furthermore, the minutes from the April 8th Lakeshore Council meeting state the the Director of Community and Development Services (I believe that's Mr. Steve Salmons) has told CEN that they will need to seek "rezoning and site plan approval" from the Town. Therefore, though I hate to do so, that Rolphtonair has been correct all along, and that, technically, CEN Biotech does not have the appropriate zoning requirements to operate a medical marijuana facility in Lakeshore.
However, I do not believe that this mean inevitable doom for FITX. Not at all. The license from HC is likely dependent on the conditions of the facility and other provisions (like contact with the local police, fire, etc.) It is entirely possible that CEN could be granted a license from HC and still not be able to run a medical marijuana facility because of zoning issues. Personally, I am of the opinion that what is likely to occur is that CEN Biotech will seek inspection and a license, be granted said license (possibly with a 'conditional' status pending rezoning approval from the local municipality), and then have extra legal weight with which they can expedite a rezoning application through the local (and possibly county) political machine. Furthermore, Mr. Chaaban has, to my knowledge, never stated that CEN Biotech intends to produce 1.3 mil pounds of marijuana straight out of the starting gate. If CEN was granted a grow license, could they possibly plant a smaller crop and not be breaking any laws for a few months (because the crop is within the limits of the current zoning, and no processing or sales are occuring during the grow cycle), while pushing their agenda through the local government?
I recognize that I'm speculating a bit here at the end, but only because I'm trying to visualize the end-game. I believe in FITX, and I'm in it to win it, I believe they will be successful, and I recognize that, at present, they do not have the appropriate zoning to run the operation that they are in the process of building. I think this will change, and, as rolphtonair said in a post a few days ago, I think that they will ultimately be successful. Thoughts?
Thanks for the reply. Where can I read about this? I still haven't found it yet. Thanks in advance!
What is this 'party' that you're referring to? I read on here earlier something about a 420Investor conference? But I haven't been able to dig up any info on it. What's taking place this weekend?
Ha! Love it!
Fantastic, AMI. Thank you SO much for the time and your efforts! Much appreciated!
Yes, 2 weeks from plant to harvest... not going to happen.
I completely agree. I had a large position that I sold off, but I couldn't but get back in, albeit at a smaller position. It is going to be an interesting finale in the current volume of the FITX story. ...out of curiosity, are you still holding a position?
Excellent DD, Investanator. Thanks for the lesson. However, PboyG has a point. The document you posted is for Windsor, not for Lakeshore. I wish I had the time to try and find similar documents verifying the Lakeshore position with regards to zoning. I do think its interesting that the Canadian government published the MMPR regs in the Canadian Gazette, as mentioned on the document from Windsor, and that Mr. Salmons stated that in the Nov. 12 Lakeshore Council minutes that the property that CEN wanted to build on had the correct zoning. Maybe Mr. Salmons or someone involved with the Council was mistaken. Regardless, your DD skills are ninja, and I certainly made too many suppositions (which obviously served their purpose). Thank you for the informed perspective. FITX's operation does indeed warrant a microscope at this point.
Excellent work, Rolph. Excellent. This is the kind of insight that hapless investors like myself need. I wish I had the time and the talent for conducting such extensive DD. Your conclusions are well-founded. Thanks for taking the time to write this. I hope others will read it as well.
At the risk of fomenting even more negativity on this board, I will say that I think you are drawing the wrong conclusion regarding the Agricultural Storage Facility valued at $900,000 vs. $12 mil. I suspect that the smaller, original building (building 1) is the building worth $900,000. The $12 mil facility is the one currently under construction. Furthermore, apparently this company is able to legally conduct business in Canada, because the Town Council of Lakeshore was made fully aware of CEN Biotech's intentions in Lakeshore in November of last year, as listed in a statement from Mr. Steve Salmons.
In the statement, the first section, headed as "Background", briefly describes the Canadian Government's 2012 decision to change its laws regarding medical marijuana (or marihuana, for the sake of our Canadian brothers and sisters). The "Background" finishes with this statement:
"Lakeshore has been notified by CEN Biotech Inc that it has applied to [H]ealth Canada for a license in Lakeshore (as required by the new regulations)"
The next section in these minutes, entitled "Comments", gets straight to the point:
[begin quote]
"The proposed location is at Manning and North Rear Road (south of the OPP detachment at [M]anning and 401). It has the correct zoning.
The site is zoned "Agricultural Use- Value Added" that provides an accessory use for processing and refining agricultural product to a final retail product. The final retail product shall primarily consist of inputs produced on the farm.
The proponent has applied to construct a 58,000 s.q. steel barn to grow and process the plants. There is also a fencing application to secure the facility. In a meeting with the proponents, they explained that there would be a number of sophisticated security measures in addition to air filtration to remove vapors and odors.
The application is currently in progress." [end quote]
For the benefit of fellow investors and interested parties, please do not take my word for it. You can find the minutes here:
http://weblink8.lakeshore.ca/WebLink8/DocView.aspx?id=9666&dbid=1
Or, if this link doesn't work for you, then try this link to the Town of Lakeshore - Agendas,...
http://www.townoflakeshore.on.ca/lakeshore_1?page=62#minutes
and then click on "Council Minutes", then select the folder for 2013 Agendas, then select the folder for "November 12, 2013 - Regular Council Meeting", then go to page 31.
Or, if all of that doesn't work, go to this link:
http://www.townoflakeshore.on.ca/
and click on the "Search Bylaws & Council Agendas/Meeting" button on the quick links menu in the middle of the page, and proceed accordingly.
The point is that CEN Biotech made efforts to be both transparent AND forthcoming about their intentions in Lakeshore, as is obvious in the Council's record of minutes from November 12, 2013. Thus, we can confidently conclude that the Council, and by extension, the town, have understood for over 5 months what CEN Biotech's intentions in Lakeshore are.
My concern is a lack of any proper financial reporting. Therein lies possible disaster. If Mr. Chaaban and co. have taken any questionable liberties with shares, this could draw the SEC like bees to honey. I'm not suggesting that they have done so. I prefer to think that Mr. Chaaban is a highly intelligent individual with a firm grasp of both the laws governing publicly-traded companies, and of the enormous opportunity he has before him to create something enormously positive and to create enormous wealth for himself along the way.
DTC,
please forgive my late reply, and in a public post. I do not have a paid subscription, and was surprised to find a message in my inbox just now. The quote that I gave was from the Lakeshore Council minutes dated Nov. 12, 2013. I included links to it in a previous post: post # 107063. Please check out the link at your leisure and let me know your thoughts.
I like the thought here, and the positive tone. However, I am of the opinion that it won't go down so smoothly and quickly with the inspectors. I don't feel like they'll show up, be given the tour, kick the tires, take pics, talk about it, and then (assuming everything is in accordance with HC requirements), sign a license and hand it over. I suspect it will be more of an "inspect the premises, take the pics, review the paperwork, talk, kick the tires, talk some more, give a vocal affirmative, and tell CEN to expect an official license to be issued in the next week to 10 days" kind of thing. You know, bureaucracy at its finest in a large federal institution that is trying to get everything right so soon after implementing a new federal law of far-reaching consequences.
Lol, me too!!!
They ARE zoned correctly. While they will be producing something that the Canadian government recognizes as a medicine, they are not "manufacturing" pharmaceuticals. They will be growing buds. Its a plant. What kind of industrial chemicals will be needed? Fertilizer. Cleaning supplies for maintaining a sterile environment. And what else? They will grow the plants, cut the plants, hang the plants to dry, clip the buds, weigh and package the buds in pill bottles or baggies, put the packages into small, sturdy boxes, and mail those to patients. This in not an industrial process, its a commercial agricultural process. The zoning provides for this level of production and refining, as per the minutes of the Lakeshore Council minutes, as recorded, for Nov. 12, 2013. Don't take my word for it here. Go to post 107063, where I posted the links.
Here is a quote from the Lakeshore Council Minutes on November 12, 2013. It was submitted to the "Mayor and Council Members" by Mr. Steve Salmons, the same guy that trash talked FITX in the Windsor Star on 4/9/14:
[begin quote]
"Lakeshore has been notified by CEN Biotech Inc that it has applied to [H]ealth Canada for a license in Lakeshore (as required by the new regulations)
The proposed location is at Manning and North Rear Road (south of the OPP detachment at [M]anning and 401). It has the correct zoning.
The site is zoned "Agricultural Use- Value Added" that provides an accessory use for processing and refining agricultural product to a final retail product. The final retail product shall primarily consist of inputs produced on the farm.
The proponent has applied to construct a 58,000 s.q. steel barn to grow and process the plants. There is also a fencing application to secure the facility. In a meeting with the proponents, they explained that there would be a number of sophisticated security measures in addition to air filtration to remove vapors and odors.
The application is currently in progress." [end quote]
Does that mean that the vault is going into Building 1? I've been confused as to where it would go. I guess it could make sense. I think that I read where Bill said that the vault had to be onsite before the inspection could take place. Another implication here is that HC will grant a license soon, because if HC has asked CEN to start growing ASAP (which is weird, maybe), well obviously they can't without a license. Better happen soon, though. Building two could be up in 2-3 weeks with good weather.
FITX carries with it considerable risk for the investor, it's true. The lack of an audit, for example, hurts the company's credibility. Yet Mr. Chaaban has stated that an audit is underway, and if I recall correctly, he has said that it should be complete by the end of April. IF this comes to pass, it likely will occur after the installation of the vault, shortly after the HC inspectors visit the site, and shortly before the confirmation of a license (should that come to pass), which means that FITX could stand to make strong gains quickly near the end of April or into the beginning of May. Thus, as Mudcat18 suggested yesterday evening, while there is certainly risk in FITX, the current pps presents a good opportunity with the upside potential surpassing the risks involved, from a certain perspective. I agree with Mudcat.
The point is that FITX with succeed or fail on its own merits, and poorly-informed reporters and schizophrenic officials do not help the situation, or the Lakeshore community (or, of course, FITX investors) by making false, misinformed, or turncoat, inflammatory statements (see post 107063). By doing so, they only foster ill wishes from the Lakeshore community and feed the already-rampant negativism on the posting boards, which, in return, confuses and scares beginning or inexperienced investors who are trying to do well for themselves and their own families. How unfortunate that this has to be the case.
As I was writing my earlier post, I failed to point out a larger and more egregious error on the part of Ms. Wolfson, who reported in the Windsor Star earlier today. Please allow me to explain.
In her article, Ms. Wolfson states that:
[begin quote]
"It’s the town’s contention that the barn cannot be outfitted with electricity, water, sewer, a vault or even bathrooms under the property’s current agriculture value added zoning. A barn is supposed to be for storage of farming equipment or farming product.
The “value added” designation allows some flexibility for processing of agriculture product, except it’s limited to a 6,000-square foot facility and no more than five employees, Salmons told council Tuesday."[end quote]
I would again refer Ms. Wolfson to the recorded Lakeshore Council Minutes of November 12, 2013, in which Mr. Salmon's statement to the "Mayor and Council Members" clearly states the following:
[begin quote]
"The proposed location is at Manning and North Rear Road (south of the OPP detachment at [M]anning and 401). It has the correct zoning.
The site is zoned "Agricultural Use- Value Added" that provides an accessory use for processing and refining agricultural product to a final retail product. The final retail product shall primarily consist of inputs produced on the farm.
The proponent has applied to construct a 58,000 s.q. steel barn to grow and process the plants. There is also a fencing application to secure the facility. In a meeting with the proponents, they explained that there would be a number of sophisticated security measures in addition to air filtration to remove vapors and odors.
The application is currently in progress." [end quote]
The important information here is the statement from the second paragraph of the quote from the Council Minutes. "...that provides an accessory use for processing and refining agricultural product to a final retail product." I would like for Ms. Wolfson, or Mr. Salmons (or ANYONE from the Town Council, for that matter) to explain exactly how the town's convention is "...that the barn cannot be outfitted with electricity, water, sewer, a vault or even bathrooms under the property’s current agriculture value added zoning," if, in fact, "...[t]he site is zoned 'Agricultural Use- Value Added' that provides an accessory use for processing and refining agricultural product to a final retail product."
This does not make sense. Period. How can a zoning structure provide "an accessory use for processing and refining agricultural product to a final retail product," if said zoning structure does not provide a facility in said zone "... with electricity, water, sewer, a vault or even bathrooms"???
(For any readers who wish to view links to the Windsor Star article that I'm quoting, or who wish to follow the links to the Council Minutes of November 12, 2013, please see my post, #107063, where I have them listed.)
If anyone should have a "contention" here, it should be the management of CEN Biotech. Either they were misled from the beginning on the part of the Lakeshore Council and their Economic Development Initiative (or Department of Commerce, or Department of Zoning and Infrastructure, or whatever), or else said entity or entities have made serious changes to their own zoning policies without considering the impact on a company that they heartily welcomed to their community. Either way, one might argue that if Lakeshore doesn't shore up it's story, it could in fact be targeted for litigation. I would hate to see this happen, as such a move could only foster more bad blood, which does nothing good for either side, but I fail to see how CEN Biotech and Mr. Chaaban (and by extension, the shareholders), are at fault here, and not in fact the victims.
However, it could simply be this: perhaps Ms. Wolfson and Mr. Salmons are having a bad day.
Gailyjane,
thanks for the reply, and thank you to the other kind replies to my earlier post (107063). FITX carries with it considerable risk for the investor, it's true. The lack of an audit, for example, hurts the company's credibility. Yet Mr. Chaaban has stated that an audit is underway, and if I recall correctly, he has said that it should be complete by the end of April. IF this comes to pass, it likely will occur shortly after the installation of the vault, shortly after the HC inspectors visit the site, and shortly before the confirmation of a license (should that come to pass), which means that FITX could stand to make strong gains quickly near the end of April. Thus, as Mudcat18 suggested yesterday evening, while there is certainly risk in FITX, the current pps presents a good opportunity with the upside potential surpassing the risks involved, from a certain perspective. I agree with Mudcat.
The point is that FITX with succeed or fail on its own merits, and poorly-informed reporters and schizophrenic officials do not help the situation, or the Lakeshore community (or, of course, FITX investors) by making false, misinformed, or turncoat, inflammatory statements. By doing so, they only foster ill wishes from the Lakeshore community and feed the already-rampant negativism on the posting boards, which, in return, confuses and scares beginning or inexperienced investors who are trying to do well for themselves and their own families. How unfortunate that this has to be the case.
However, I feel the need to apologize. As I was writing the other post, I actually failed to point out a larger and more egregious error on the part of Ms. Wolfson. Please allow me to explain.
In her article, Ms. Wolfson states that:
[begin quote]
"It’s the town’s contention that the barn cannot be outfitted with electricity, water, sewer, a vault or even bathrooms under the property’s current agriculture value added zoning. A barn is supposed to be for storage of farming equipment or farming product.
The “value added” designation allows some flexibility for processing of agriculture product, except it’s limited to a 6,000-square foot facility and no more than five employees, Salmons told council Tuesday."[end quote]
I would again refer Ms. Wolfson to the recorded Lakeshore Council Minutes of November 12, 2013, in which Mr. Salmon's statement to the "Mayor and Council Members" clearly states the following:
[begin quote]
"The proposed location is at Manning and North Rear Road (south of the OPP detachment at [M]anning and 401). It has the correct zoning.
The site is zoned "Agricultural Use- Value Added" that provides an accessory use for processing and refining agricultural product to a final retail product. The final retail product shall primarily consist of inputs produced on the farm.
The proponent has applied to construct a 58,000 s.q. steel barn to grow and process the plants. There is also a fencing application to secure the facility. In a meeting with the proponents, they explained that there would be a number of sophisticated security measures in addition to air filtration to remove vapors and odors.
The application is currently in progress." [end quote]
The important information here is the statement from the second paragraph of the quote from the Council Minutes. "...that provides an accessory use for processing and refining agricultural product to a final retail product." I would like for Ms. Wolfson, or Mr. Salmons (or ANYONE from the Town Council, for that matter) to explain exactly how the town's convention is "...that the barn cannot be outfitted with electricity, water, sewer, a vault or even bathrooms under the property’s current agriculture value added zoning," if, in fact, "...[t]he site is zoned 'Agricultural Use- Value Added' that provides an accessory use for processing and refining agricultural product to a final retail product."
This does not make sense. Period. How can a zoning structure provide "an accessory use for processing and refining agricultural product to a final retail product," if said zoning structure does not provide a facility in said zone "... with electricity, water, sewer, a vault or even bathrooms"???
(For any readers who wish to view links to the Windsor Star article that I'm quoting, or who wish to follow the links to the Council Minutes of November 12, 2013, please see my post, #107063, where I have them listed.)
If anyone should have a "contention" here, it should be the management of CEN Biotech. Either they were misled from the beginning on the part of the Lakeshore Council and their Economic Development Initiative (or Department of Commerce, or Department of Zoning and Infrastructure, or whatever), or else said entity or entities have made serious changes to their own zoning policies without considering the impact on a company that they heartily welcomed to their community. Either way, one might argue that if Lakeshore doesn't shore up it's story, it could in fact be targeted for litigation. I would hate to see this happen, as such a move could only foster more bad blood, which does nothing good for either side, but I fail to see how CEN Biotech and Mr. Chaaban (and by extension, the shareholders), are at fault here, and not in fact the victims.
However, it could simply be this: perhaps Ms. Wolfson and Mr. Salmons are having a bad day.
FITX investor community,
I have only been able to sporadically follow today's dialogue on this board concerning the article released today in the Windsor Star and the content within that is apparently shaking investor confidence in FITX and its current construction project in Lakeshore. I have read the article, and I have some problems with it. I intend to address 1) a statement on the part of the reporter, Monica Wolfson, and 2) a specific statement attributed to a Mr. Steve Salmons, who is listed as the Director of Community and Development Services. My intention is to point out an error on the part of Ms. Wolfson's facts, and a seemingly significant inconsistency on the part of Mr. Salmons and his issue with FITX. For the record, as I previously stated, I have only been able to follow today's ihub dialogue sporadically, so if anything I cover in this post is old news, I sincerely apologize for wasting the reader's time. It is merely my desire to contribute in a positive manner to the dialogue for the benefit of all concerned.
Ms. Wolfson's article states that, "[a]t issue is the construction and zoning of a 53,000-square foot pole barn." Then the article goes on to state that:
[begin quote]
"It’s the town’s contention that the barn cannot be outfitted with electricity, water, sewer, a vault or even bathrooms under the property’s current agriculture value added zoning. A barn is supposed to be for storage of farming equipment or farming product.
The “value added” designation allows some flexibility for processing of agriculture product, except it’s limited to a 6,000-square foot facility and no more than five employees, Salmons told council Tuesday.
Salmons said he sent the letter to CEN Biotech because the company was putting out press releases and reporting through media stories and in YouTube videos information that contradicted what company officials told the town in meetings before Christmas.
“There seems to be a lot going on that’s inconsistent with a 6,000-square-foot facility,” Salmons said. [end quote]
While I know that a link to this article has been posted on this board many times today, for the ease of the reader, and particularly newcomers to the dialogue, all may view the article here:
http://blogs.windsorstar.com/2014/04/08/lakeshore-questions-zoning-for-medical-marjuana-operation/
Now then, my first issue is with Ms. Wolfson's statement that "...the company was putting out press releases... that contradicted what company officials told the town in meetings before Christmas."
At present, I will freely admit that I have no direct evidence to argue against Ms. Wolfson's statement, because I have not researched what CEN Biotech has told the town. However I will show that the town council has known about CEN Biotech's intentions at least since November of 2013. Please bear with me...
My second issue is with Mr. Salmons' statement that "[t]here seems to be a lot going on that's inconsistent with a 6,000-square-foot facility".
Admittedly, Mr. Salmons IS correct. There ARE a lot of things going on onsite that are VERY inconsistent with a 6,000-square-foot facility. One has only to look at the photos made available by Mr. Chaaban, the CEO of CEN Biotech, and by various investor-friends and interested parties in Lakeshore who have graciously taken their time to post pictures of the build site (my thanks to them). The construction looks wonderful, the building will be HUGE, and progress is occurring at pace. It is painfully, nay, blatantly obvious that this will be no simple "6,000-square-foot facility".
HOWEVER, I have to question either the motives, or the professionalism of Ms. Wolfson, and the motives of Mr. Salmons, on the grounds of information that is readily available online from the Lakeshore Council Minutes, dated November 12, 2013. Specifically, beginning on page 31, in a statement addressed to "Mayor and Members of Council" from "Steve Salmons, Director".
In the statement, the first section, headed as "Background", briefly describes the Canadian Government's 2012 decision to change its laws regarding medical marijuana (or marihuana, for the sake of our Canadian brothers and sisters). The "Background" finishes with this statement:
"Lakeshore has been notified by CEN Biotech Inc that it has applied to [H]ealth Canada for a license in Lakeshore (as required by the new regulations)"
The next section in these minutes, entitled "Comments", gets straight to the point:
[begin quote]
"The proposed location is at Manning and North Rear Road (south of the OPP detachment at [M]anning and 401). It has the correct zoning.
The site is zoned "Agricultural Use- Value Added" that provides an accessory use for processing and refining agricultural product to a final retail product. The final retail product shall primarily consist of inputs produced on the farm.
The proponent has applied to construct a 58,000 s.q. steel barn to grow and process the plants. There is also a fencing application to secure the facility. In a meeting with the proponents, they explained that there would be a number of sophisticated security measures in addition to air filtration to remove vapors and odors.
The application is currently in progress." [end quote]
For the benefit of fellow investors and interested parties, please do not take my word for it. You can find the minutes here:
http://weblink8.lakeshore.ca/WebLink8/DocView.aspx?id=9666&dbid=1
Or, if this link doesn't work for you, then try this link to the Town of Lakeshore - Agendas,...
http://www.townoflakeshore.on.ca/lakeshore_1?page=62#minutes
and then click on "Council Minutes", then select the folder for 2013 Agendas, then select the folder for "November 12, 2013 - Regular Council Meeting", then go to page 31.
Or, if all of that doesn't work, go to this link:
http://www.townoflakeshore.on.ca/
and click on the "Search Bylaws & Council Agendas/Meeting" button on the quick links menu in the middle of the page, and proceed accordingly.
The point is that CEN Biotech made efforts to be both transparent AND forthcoming about their intentions in Lakeshore, as is obvious in the Council's record of minutes from November 12, 2013. Incorrect spacial facts aside ("53,000 s.f.," as opposed to the official "58,000 s.f" dimensions of the facility), for Ms. Wolfson to say that Mr. Chaaban and co. have been issuing press releases in a myriad of media outlets that are "contrary" to what they told the town, is really just trash talking. It may, in fact, not be false, because, again, I don't know what Mr. Chaaban and co. have said to THE TOWN. However, the town's LEADERSHIP has been FULLY aware of CEN's intentions regarding the size, location, and purpose of the facility under construction, for almost five months, as per their own Council's recorded minutes.
Furthermore, Mr. Salmon's statement from the Windsor Star article, as quoted previously, is actually directly contrary to the information that he, himself, supplied to the "Mayor and Council Members" regarding the size and purpose of CEN's facility, as per his own statement listed in the noted Council Minutes.
In conclusion, I have never met or had any communication with Mr. Chaaban, and therefore cannot speak to the quality of his character, nor of his true intentions regarding the facility under construction. AND as a shareholder in FITX, and being aware of the company's history, I am certainly concerned for FITX's success, and wary of the risks involved. Nonetheless... something funky is going on up in Lakeshore, and if Mr. Chaaban's statements or behavior are in the least bit questionable, then I would suggest that that goes double for a local reporter, and triple for a back-stabbing Director of Community and Development Services. Thus, I am more than willing to give Mr. Chaaban some breathing room to get on with the business of building the business. So far, regarding the facility, he has done what he has said he was going to do, and he has obviously taken the appropriate steps to make sure that the town officials, and by extension, the town, understand what CEN Biotech is doing in Lakeshore. I find it deplorable that a local reporter can't get facts straight, and that a local official is speaking out of two sides of his mouth and endangering what has amounted to months of work on the part of many,and millions of dollars spent, in pursuit of a perfectly legal and legitimate enterprise. The Lakeshore community and FITX's investor community all have so much to gain from the completion of this project, and Mr. Chaaban has evidently been working diligently to make it happen. The project is not too big to fail, but I would argue that, with so much at stake, particularly for Lakeshore, the project is too big to LET fail. God or the Fates, please save us from irresponsible reporters and fork-tongued officials.
I would argue differently. The TWD IPO is, in fact, very successful, from a certain perspective. I have not had the time to find a website that shows TSX listings in order to follow the IPO, but a few messages that I've read on here have suggested that the opening price was well above $2.50 (did I read $4)? Then I read a message here that said TWD has lost half of its value so far today.
I visited the Tweed website late last week to scope out the IPO. Their website said that they would be listing this week, with shares under a dollar. If I understand the way a listing works, then the underwriters buy up shares from the company, and then they sell the shares to the public during the IPO. I may be COMPLETELY mistaken, and if so, please correct me so that I understand better. That aside, the underwriters were very aware of the amount of interest that this IPO had garnered. In fact, Steward, didn't you mention in a post that you had spoken to your broker yesterday or last night, and that he/she said that they had been getting calls all day about the listing? Maybe it wasn't you. In fact, now that I think about it, it probably was someone else. Regardless, the underwriters saw the chance to make a quick fortune, and jacked up the pps WAY over what it was worth, and what the company itself felt it should be listed at. A drop was inevitable. It will stabilize lower and come back up. Tweed has a crop ready for sale. They will make a profit this quarter. That doesn't mean that they already had the customer base - that has to be established starting now. They couldn't have had a large customer base before April 1st anyway. I would argue that this will help FITX in the long-run because TWD will do the dirty work insofar as establishing a clientele is concerned, and give FITX the chance to ride TWD's coattails, as well as create competition and variety against TWD.
Furthermore, look at how much attention the IPO has been getting! How many shares have been traded in this IPO this morning?!? I think that the idea that "even bad press is good press" is particularly applicable to this situation, if one is willing to consider FITX, in fact the entire MMJ industry, with a long lens. The TWD IPO represents a success because a company that wants to do, in fact will be doing shortly, what FITX wants to do, is going public, is raising interest, and will have a chance to get a product out and report earnings, probably a quarter ahead of FITX (assuming, of course, that things go well with obtaining the license). This IPO is not bad news for FITX. It is good news, and will give FITX many windfalls worth of investor interst in the near-to-mid future.
I'm surprised that you are leaving the stock. I've followed your posts in the last few days, and you seem to have some great arguments as to why FITX has great potential. Why the change of heart? Do you think that FITX is a scam?
Steward,
what an excellent and well-thought post. Thank you. I second everything you just said.
It's true that there is plenty of room to speculate either for FITX to succeed or for it to fail. And there is ample room on either side of the coin for the company to fall. The questions of permits, and pump schemes, and so forth, certainly have merit, and no doubt are posed by at least some well-intended, cautious, and obviously experienced investors. However, I've kept up with enough posts on here long enough now to have heard the same negative arguments being run into the ground, and a few individuals in particular keep trying to create, almost enforce, a certain negativity surrounding what FITX, and in particular, Mr. Chaaban, are trying to do, as well as question the validity behind their motives.
Perhaps the insiders are making business deals with other (and, in my opinion, reputable) companies such as PHOT, are posing for photo ops with Windsor/Lakeshore officials for the local newspapers, are posting mobile uploads of construction progress, are attending conferences, are submitting to interviews with online news and investor sites, and are positioning themselves to be mentioned in other national and international media outlets, all to construct and execute an elaborate pump-and-dump scheme in order to make a quick fortune. It could be the case.
However, it seems more plausible to me that said insiders actually grasp the true potential of the movement in North America, and around the world, to legalize medical/recreational marijuana, and the sheer scale of the coming industry. It's entirely possible that these individuals are actually trying to create a solid, long-term business with enormous potential.
What strikes me as interesting regarding the business potentials for this company as discussed on this board is a relative LACK of discussion about the potential for FITX to export its products to the U.S. and abroad. However, my own ability to conduct solid due diligence is admittedly weak, as I profess an unfortunate naivety with regards to the inner workings of business. Nonetheless, I have to say that FITX's location for construction of a large growing facility is prime. They are based in Michigan, and the facility is quite close to Detroit. They are, therefore, based in a state that has legalized medical marijuana, and are constructing nearby in a country that now allows the commercial-scale production of marijuana for sale and for export. Am I mistaken in this? IF FITX was granted a license to grow, would they not also be legally eligible to export? Furthermore, where exactly does all of the med/recreational pot being sold in Colorado and (soon) in Washington, and the medical marijuana being sold in the other 18 states and Washington D.C., come from? I have tried to identify the suppliers in the U.S., some of whom by now must be well on their way towards enormous profitability, and I have been unsuccessful. However, they must exist, and they are not Big Tobacco or other publicly-traded, multi-billion dollar companies, because such companies can't afford to tread this early into an enterprise that the U.S. government could, within its own power under current federal law, attack and demolish. Is this not an already viable market in which FITX could compete, in which it could export to from a facility in Canada? I'm asking simply because I want to form an educated opinion regarding the motives of FITX and it's administration. Perhaps I am mistaken, but it would seem like the long-term potential is more profitable, and less legally questionable, than all of this energy being spent to pump and dump.
As I posted earlier, it does concern me that PHOT and RXNB almost had a lawsuit and failed business agreement. I expect that PHOT is waiting to sign on the dotted line to acquire the 40% equity stake in RXNB until they know for sure that Mr. Chaaban and Co. at FITX are actually going to properly execute the construction of the facility and the procurement of a license. I can't blame PHOT for this. If PHOT pulls out, I most likely will as well. If they sign, I'll commit long. For now, the best I can see to do is hold and wait. Why all of the negativity on repeat from the same individuals, though?
An excellent question, and one I can't answer definitively. As I understand it, in its deal with CEN, PHOT got exclusivity in providing the grow tech for the facility. RXNB, founded by CEO Sam Alaweih, who is also on CEN board, has a deal with CEN also to provide grow tech and licensing. As I understand it, the deal between PHOT and RXNB is for PHOT to acquire a 40% equity stake in RXNB, which makes RXNB an affiliate (or subsidiary?) of PHOT, which makes the supply of grow tech from RXNB to CEN perfectly legit with regards to the exclusivity deal between PHOT and CEN
see here http://www.prnewswire.com/news-releases/growlife-and-cen-biotech-announce-collaboration-on-the-worlds-largest-and-most-advanced-legal-cannabis-production-facility-242555781.html
"...Growlife and its affiliates will serve as CEN Biotech's supplier of legal cannabis growing equipment...")
Furthermore, CEN Biotech will have the advantage of RXNB's distribution network in the U.S., and (assuming that CEN gets a license from HC) will be able to export its (assumed) product.
However, PHOT owns a 45% stake in OGI, which owns a 25% stake in CEN, and if things go sour between RXNB and PHOT directly, it could cause damage to all three companies, particulary if litigation occurs between Alaweih's RXNB and PHOT. Considering that PHOT has to deal with Alaweih via CEN as well, since he's their VP of operations, any bad blood from one vein could leak into another. We don't need litigation, we need a license, a grow facility, and a harvest.
I don't know if I'm making any sense. I'm just trying my hand at doing some good DD, and I see the potential for sour deals and lost investment on the part of the outsiders. However, I do remain cautiously optimistic, and I have a lot of faith in PHOT. Again, their interest in CEN created my interest in CEN.
I worry about the deal between PHOT and RXNB as well. Why a SECOND extension of the closing of the deal between them? I suspect it has to do with the growing facility that CEN is building, of course, but for the record, Mr. Chaaban is not the owner and CEO of RXNB. Sam Alaweih is the founder and CEO of RXNB, according to this article:
http://tech.fortune.cnn.com/tag/rxnb/
He is also the vice president of operations for CEN Biotech, according to this article:
http://blogs.windsorstar.com/2014/01/07/company-invests-12-million-to-grow-medical-marijuana-in-lakeshore/
I had previously searched RXNB to see what Bill Chaaban's role was with that company. I can speculate that he is a large shareholder of RXNB, but that is only speculation - I haven't found any evidence that he is directly linked with RXNB, other than his business relationship with Mr. Alaweih and the agreements between the three companies. I heard him say in an interview on 420Investor that he had sold some of his shares in CEN to help fund the growing facility's construction, and that he was moving money from his own "private company" into the mix to help out with construction costs, but I haven't as yet found out what business (or businesses) he owns. Howeverm for those that don't know, RXNB is a privately-owned company. The interview with Mr. Chaaban and 420 Investor can be heard here:
www.youtube.com/watch?v=fExx1SUXyEM
I agree that the threat of litigation from RXNB against PHOT does not help maintain the most collegiate of atmospheres between the two companies, and that worries me. I am a small-time investor with relatively insignificant funds to invest, and I have taken significant (for me) losses over the last few years in experimenting and educating myself with the market and investment strategies. I invested in FITX largely because of the interest and stake that PHOT has in the company, and because I believe in the potential of what they're trying to accomplish, but I got in late (.083/s) and I don't want to lose big this time. I am cautiously optimistic in the progress of the facility and the upside potential of the company, but I only trust Mr. Chaaban so far. Hearing him speak on 420 Investor and on MoneyTV did not instill me with an overabundance of faith - he obviously knows business, and I have no doubt he knows how to handle the law, but he is not an extraordinarily eloquent speaker, and he has made a few mistakes in some interviews, all of which have been well-documented here by the bashers and fellow-nitpickers. However, he doesn't have to be a great orator to bring the company's plans to fruition. I just hope that the deal with PHOT doesn't go sour, because that would be a major setback, or worse.
Mrs. Wolf, thank you so much!!! What an incredibly encouraging post! I sincerely hope you will continue to keep our community updated.
Hello all. Like others, I usually watch from the sidelines and do not invest in entering the discourse. However, after reading several of today's posts, I went through all of the pics posted on CEN's facebook page. Given some of the topics of discussion on this board, I wanted to make a few suggestions as to the strategy of the building site, contest some of the contrarians, and (ultimately) to get some feedback (if only to help me understand if my initial investment in this company was a good call or not).
First, I read an article on Seeking Alpha that suggested CEN was unwise to build a facility instead of purchasing an existing facility. It appears that the build site belongs (or belonged) to Mr. Chaaban's brother. Furthermore, while CEN is pumping the greatness of it's soon-to-be new facility, the site already has a ~24,000 sq ft building that can be refitted as a growing/production facility, which means that the facility being built doesn't have to include that extra space, which means overall lowered construction costs, and excellent overall square footage. So it seems that CEN, its affiliates, and its investors, all win, and Mr. Chaaban's brother gets something out of the deal. This makes sense to me.
Secondly, some of the comments on here have questioned the building of a fence as the first priority on the site. I would suggest that the fence is only ONE of the first priorities. Get the fence up as part of the property's security (the demands for which appear to be extensive in order for a license from the Canadian government to be issued) and get the existing building refitted so that it can be inspected, given the green light, and a license issued. Then a first, smaller crop can be started sooner while construction continues or is completed on the larger facility. After all, there's nothing wrong with growing a tester crop in one facility and simultaneously constructing another facility on the same property. I don't know if that's the plan, but it makes sense. After all, CEN is in an agreement with Growlife, who got not only a stake in the future proceeds, but also exclusivity in providing the horticulture infrastructure. So we know that the lighting and irrigation will be quickly and easily acquired when needed. By getting the smaller, existing facility up to government standards and a security fence erected, the license can be obtained faster (CEN says on its ihub page that the Canadian government has asked them to expedite).
Finally, to the same contrarians - please take the time to look through the photos on Facebook. Go to the Creative Edge Nutrition page, not the CEN Biotech page, and you'll find many, many photos, several of which are from March. It appears that much has been done in preparing to build the new facility, and it appears that much activity is also occuring in/around the existing building. I have to say, I was pleased by what I saw. Also, I can see why some would question the matter of the local building permit. A picture of a permit is up on Facebook, and it does in fact say "pole barn", but that was from November of 2013. While planning the facility may have taken place last year, construction on it began this year, and maybe they aren't allowed or don't care to bother with providing pics of it. After all, as was said by someone else, they would not have been able to start the construction if they didn't have a permit. And to that end, in the pictures on Facebook, one can see the front page of the local newspaper talking about CEN's plans. The prose and the tone of the article are quite favorable - it appears that attitudes among many of the locals is as well. Assuming that the facility is completed and plans come to fruition, the local community has much to gain in revenue and jobs. Therefore, it appears that the local township is fully aware of CEN's plans, that they approve, and all legal steps have been taken. Personally, I would like to see them get the license and start growing in the smaller facility while completing the larger one, instead of waiting to finish the bigger building, then getting the license, then planting.
I have to say, at this point, I am cautiously optimistic in my investment, and plan to go long. Thoughts?