Canna Corp (fka CNCC)

[CashBowski]

I can give you some insight...

but at the same time I understand some of the questionable comments, as it’s a little odd to be issued (and accepting) a stock cert without first questioning Dror Svorai (or previously Davis) who issued the cert about the process, or why not just call up either of those two parties for instructions. I can give you Dror’s direct contact if you like, but here’s what’s involved in simple terms...

If you’re not an “affiliate” which I can safely assume you’re not, and were probably compensated with shares for either services or a personal note, you fall under conditions of Rule 144.

If you’re not (and have not been for at least three months) an affiliate of the company issuing the securities (RCGR) and have held the restricted securities for at least one year, you can sell the securities without regard to the conditions in Rule 144 (more info below).

Since RCGR is subject to the Exchange Act reporting requirements and, if you have held the securities for at least six months but less than one year, you may sell the securities as long as the company satisfies the current public information condition.

As usual — they’re not current in their reporting requirements (current public information condition), hence the yield mark on OTCM. That’s why the stock price has been climbing since diluters can’t sell/convert paper while a company is not current in their reporting.

A standard 33 Act cert has a restrictive legend that reads something like this:

These securities have not been registered under the Securities Act of 1933, as amended (the ’act’), or under applicable state blue sky laws (’blue sky laws’) and may not be sold, pledged or otherwise transferred unless covered by an effective registration statement under the act and any blue sky laws, in compliance with rule 144 under the act and any similar regulations under blue sky laws, or the company has been furnished with an opinion of counsel reasonably acceptable to the company to the effect that no registration is legally required for such transfer under the act or any blue sky laws.

Their legend might read more like this:

NEITHER THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS NOTE NOR THE SECURITIES INTO WHICH THIS NOTE IS CONVERTIBLE HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL (WHICH COUNSEL SHALL BE SELECTED BY THE HOLDER), IN A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID ACT. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.

Can the securities be sold publicly if the conditions of Rule 144 have been met?

Even if the conditions of Rule 144 have been met, the restricted securities cannot be sold to the public until the restrictive legend has been removed from the shares. Only a transfer agent can remove a restictive legend. However, the transfer agent will not remove the legend unless consent of the issuer has been obtained — usually in the form of an opinion letter from outside counsel (Pay an attorney couple hundred bucks for an opinion letter) — that the restrictive legend can be removed. Unless this happens, the transfer agent doesn’t have the authority to remove the legend and permit execution of the trade in the marketplace.

To begin the process, you should first contact their transfer agent to ask about the removal of the legend and get the process started as it could take up to a week or longer to complete. The sooner the better as you’ll likely be going against other diluters and most importantly Curt Kramer since he settled his suit with RCGR last week, and he’ll be issued free trading shares in 10% tranches.

Once you get the legend removed you’ll have to find a broker to take the shares, and big brokers won’t touch penny stock certs, so you have to look for a secondary broker (mostly all in Utah) to convert the cert to free trading stock. Unlike street brokers with a flat transaction fee, these brokers charge a percentage for each transaction (1.5 to upwards of 7%). Alpine up to a few months ago was the place to go for this service, but they’ve come under heavy SEC scrutiny for being fast and loose with certs. Regardless, the transfer agent can advise you with this as well since for the most part they’re all located in that region of the country (Utah) and work hand in hand.

There’s quite a few more steps and details involved that I can’t fully explain without knowing exactly your relationship to insiders and how many shares you hold since that information also can affect restrictions.