Cultivation Technologies Inc., the first cannabis-related business entity to receive a development agreement from the City of Colusa, is under investigation by the United States Securities and Exchange Commission (SEC), the company announced in a disclosure addressed to shareholders, stakeholders, and partners.
The Pioneer Review obtained a copy of the disclosure, which was sent to city staff, through a California Public Records Act request.
“We endeavor to be a fully-transparent company. We have followed the advice of securities counsel and implemented comprehensive disclosures since the inception of the company,” Miguel Motta, the company’s president and CEO wrote in the statement. “While not required to do so, CTI is sharing the following information. The staff of the United States Securities and Exchange Commission… is conducting an investigation of CTI. CTI is fully cooperating with the SEC in this process. Because this is at an early stage, the company cannot predict when this will be concluded. CTI and its securities counsel do not expect that this will culminate in any enforcement action.”
Rob Bernheimer, CTI’s legal counsel, said on Monday that the company has “had some challenges with a former CEO of our company” who was not involved when they started working with the City of Colusa.
“Some of this stuff is related to that,” Bernheimer said. “Our attorneys are confident that we have done nothing wrong. We are obviously cooperating with the SEC, and we are happy to do so.”
Bernheimer added that such investigations are “part of the process sometimes with being this type of industry, and us being at the forefront of that.”
CTI has yet to move forward on their proposed project in Colusa, which Bernheimer said is a function of the company’s focus on their project in Coachella.
CTI began operations in Coachella on Sept. 12, with a medical cannabis interim extraction facility, which was part of CTI’s conditional use permit in Coachella, and will be operational during the course of construction for the permanent, six-acre facility there.
“We made a conscientious decision to wait a couple months to see though the construction and operations in Coachella. As it began, we have learned a couple of things… and we are in the process of incorporating some of those ideas into a plan we will bring forward to Colusa. We’re now moving full-steam ahead on getting things going in Colusa.” ■