Is Cannabis Factory leaving Cobourg?

In these days of factories shutting down, it’s hard to know if something is temporary or permanent – and it doesn’t help if contact people are unreachable or don’t have answers.  But we have two facts: 1) The operators of the Cannabis operation at 520 William street announced on March 23 that they are stopping production at their plant because of Covid-19 restrictions. Less noticed but more importantly, around the same time (the broker didn’t remember exactly when), 2) the entire plant was put up for sale for $19.9M.  If their plant is up for sale, then the idea that all their staff is “furloughed” is questionable.  How can they return to work if their building has been sold?  So let’s look at exactly what has been published.

See the links below for the complete source information but here are the key parts:

1. Plant Shutdown – 23 March 2020

Effective immediately, FSD Pharma management has implemented a systematic and orderly scale back of FV Pharma’s cultivation operations and a furlough policy for its workforce, except for certain personnel working staggered shifts to ensure continuity of operations and licensure. The Company has also closed its facility to collaboration partners and ceased their operations.  

2. Real Estate Listing – highlights

Price $19,900,000
Address: 520 William St., Cobourg, Ontario K9A 3A5
Size: 581,538 sq. ft.
Pharmaceutical-Grade Manufacturing Facility located In the heart of Cobourg. Close proximity to Highway 401. Access to plenty of surrounding amenities. Approximately 18.96 acres of additional “Developable” land included.
Leaseback on 40,000 square feet of office space required.

The leaseback requirement implies that they want to shut the factory but keep the offices for their company.  If true, that would mean the company no longer plans to grow weed but instead simply operate a medical cannabis business.  However, I note that previous announcements talked about a “25,000 square foot licensed cultivation area” so maybe “Office” includes some cultivation space. What happened to the grandiose HUGE growing area?

Sorry to be extrapolating and asking questions instead of providing answers – feel free to draw your own conclusions from the two announced facts.

Update – 5 June 2020

FSD Pharma announced that they have received “U.S. FDA Approval to design a Phase 2a Clinical Trial to Treat Patients with Suspected or Confirmed COVID-19 Diagnosis”  The stock jumped on this news.  Details here.

Links

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62 Comments
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18 May 2020 1:50 pm

Their asking price for that property is grossly over inflated like their stock shares, so divide by 20 and make your offer!

Sue
25 April 2020 2:16 pm

It’s not weed it’s Marijuana. I found the choice of words interesting and inappropriate. The industry tanked as fast as it began so no doubt we can expect a change…although I would think productdemand would be quite high based on what we’re seeing in liquor store sales.

Observer
22 April 2020 7:34 pm

Perhaps with a large residential complex of high to low income established in place of the Park Theatre this would provide further business sales in a struggling downtown – see comments below on Park Theatre.

perplexed
Reply to  Observer
24 April 2020 10:46 am

The new owner proposed that but with all the restrictions Heritage – Height –
Parking now the post office lot was sold off . and the Socialite community input it seemed nearly impossible

Observer
Reply to  perplexed
25 April 2020 12:47 pm

Thank you perplexed for your informative answer on the Park Theatre. I have looked at it many times and thought of the many uses the building and space could be put to. Probably filling with mice – just like the old property on Cavan Street in Port Hope which is also left to rot away.

Robert
22 April 2020 4:27 pm

I toured this plant when it first opened could not get a financial statement from the owner just promises that it would be the biggest in the world as a producer of pot ,, He was selling shares but I felt it was unstable from the start .. With lots of hype for employment ?? What happened to all that publicity

Frenchy
Reply to  Robert
22 April 2020 5:47 pm

Did the guy look anything like this?

comment image?fit=960%2C728&ssl=1

perplexed
22 April 2020 8:13 am

Just Tell me the Town and the County Properly secured and recovered Our investments
again we will never know the real facts as the County tends to not disclose these losses

Observer
21 April 2020 9:28 pm

Companies sell shares in their business to raise money. They then use that money for various initiatives: A company might use money raised from a stock offering to fund new products or product lines, to invest in growth, to expand their operations or to pay off debt.https://www.nerdwallet.com/?trk=nw_gn_4.0

With the original owner selling out a huge portion of shares it would appear the funds for production went with him. Auxley Wheaton pulled out their 50M financing promise after supplying only 7.5M terminating the contract. The production area was never expanded as a result and the company went to medical over recreational. Apparently the management of FV Pharma is in complete turmoil according to the last Cobourg Blog offering. Google for complete story under prior Cobourg Blog

Frenchy
Reply to  Observer
21 April 2020 10:01 pm

He sold his personal shares and took the money. (got out while the getting was good so to speak)
Most likely those shares were given to him as a form of compensation rather than him purchasing them. Companies only receive money on the original sale of shares, not resales.
Correct me if I’m wrong, but one of us is missing this completely. 🐓

CHRISTINA
21 April 2020 1:55 pm

give me some hope, PLEASE!

Frenchy
21 April 2020 1:43 pm

Can’t remember seeing it anywhere, but, did they ever get a crop off?

Observer
21 April 2020 1:28 pm

Must say thank you Ken Strauss and Jim T. The sudden downsizing of FSD Pharma has raised many quesitons. In “speaking” with you both I now realize I would like to increase my knowledge on publicly traded shares. I tend to, like many, stick to my beliefs but realize now I need to learn more. Inside stock holder category is another I would like to learn more about.

Meantime I hope there will be further input to all of us on exactly what has transpired and if they town is losing on business assists rendered. All of you provide many thoughts – let’s hope we get answers.

Curmudgeon
21 April 2020 11:03 am

Here are our usual posters salivating at the news that FSD Pharma has curtailed production because of the virus and the layoff of workers.
And wouldn’t it be loverly, if FSD Pharma left town or went bankrupt throwing the whole work force out on the street.
And oh what fun they will have when more stores and small businesses go under because of the virus.
Sad, but not surprising.

Ken Strauss
Reply to  Curmudgeon
21 April 2020 11:14 am

FSD Pharma’s demise started long before COVID. Curmudgeon, uninformed and derogatory comments are not useful. BTW, how many FSD workers do you think are now on the street?

Curmudgeon
Reply to  Ken Strauss
21 April 2020 1:04 pm

FSD is not ‘demised’ yet, although you are living in hope Ken.
OMG!
It could be because they hired consultants? WoW!
I did not know the businesses hired consultants in the first place.
I thought with employees like you businesses knew it all.
According to your helpful and well-informed posts here, the over-paid and under-worked Town Staff needed consultants.
BTW you are the number cruncher. How many FSD workers are on furlough?
Anyway, I hope that FSD stays in business and in Cobourg to give jobs to our people.

Frenchy
Reply to  Curmudgeon
21 April 2020 5:04 pm

Number crunchers only crunch numbers Curmudgeon, why don’t you tell him how many locals are employed there and maybe he’ll crunch you some.

Ken Strauss
Reply to  Curmudgeon
21 April 2020 6:37 pm

Curmudgeon, I’m sure that you didn’t actually believe Mr. Henderson’s promise of 1500 new jobs! See https://globalnews.ca/news/5208277/new-cobourg-medicinal-marijuana-facility-aims-to-hire-1500-people-by-2021/

Curmudgeon
Reply to  Ken Strauss
22 April 2020 9:53 am

Actually I did, and I still do, Ken.
1500 new jobs for Cobourg would be great.
And unlike you, I think neither Mayor Henderson, nor Council, nor Staff are in the habit of telling lies.

Ken Strauss
Reply to  Curmudgeon
22 April 2020 1:43 pm

Certainly not lies but perhaps unwarranted optimism. A previous mayor was optimistic about Luxlight opening an R&D centre in Cobourg and we all know how that turned out.

Frenchy
21 April 2020 9:09 am

Our pal Rob might have had this figured out a while ago.
” It would appear the company’s primary export is not cannabis but stories about what they will do in the future”

“This entire business has resembled a snake oil sales job for a very long time now…”
https://www.cobourgblog.com/news-2020/work-to-start-on-restoring-certo-building/?highlight=certo#comments

perplexed
Reply to  Frenchy
21 April 2020 9:12 am

again home work on the Start up people was it ever done ?

Frenchy
Reply to  perplexed
21 April 2020 9:37 am

We were too busy buying 76 trombones.

Frenchy
Reply to  Frenchy
21 April 2020 12:28 pm

And the two “thumbs downers” were busy buying 110 cornets.😄🎺

perplexed
21 April 2020 8:29 am

There goes all that funding and incentives the Town and County gave away again not to mention the free services and utility for a while
I wonder if they were smart enough to properly secure them selves and the Tax payers investment this time

The writing has been on the wall for a very long time the
This was a great investment for the Original buyers when you look at the original acquisition price for the whole property , Then the $$ they made from salvaging all the equipment and stainless steel , selling the little building at the front 10 -12 ,000 sq ft to the County for huge $$ that more than paid for the whole property
and now a massive Capital gain .

cornbread
Reply to  perplexed
21 April 2020 9:12 am

Just another example of B.S. baffles brains in this town…forget the phony promises…show me the cash!

Observer
Reply to  cornbread
21 April 2020 11:36 am

Yes cornbread – show me the cash – apparently they didn’t have enough behind them and when they failed on the stock market thunder clouds arose raining on their crop.

Curmudgeon
Reply to  perplexed
21 April 2020 10:17 am

Could you give us the sources for your statement “there goes all that funding and incentives the Town and County gave away again not to mention the free services and utility for a while”?
Starting to wonder whom our usual posters dislike more – private enterprise or public initiatives.

Observer
Reply to  perplexed
22 April 2020 7:07 pm

perplexed – have been searching for funding incentives and free utility service for FV Pharma – have not been able to find reference. Could you provide link to these? I had hoped to see them otherwise it appears to be a disappointing business, With their funding yanked of 50M promised down to 7.5 apparently they could not meet the full scope of their business promise. Disappointing for Cobourg but I still search for the financial support provided by Cobourg. Can you find any supportive evidence of support provided? Most interested in seeing this.

John Hill
21 April 2020 8:23 am

Wasn’t FD Pharma supposed to preserve the old Certo building ass a heritage site and make it a sales outlet for cannibis products? The roof is now off the building and yellow tape surrounds its exterior. Will renovation cease? If the company leaves town and does not complete the work on the Certo building, we will be left with an eyesore.

perplexed
Reply to  John Hill
21 April 2020 8:35 am

They never checked out the Original Buyer Thomas F
I believe he was involved in a Tire recycling business yrs ago in Col borne

Ken Strauss
Reply to  John Hill
21 April 2020 9:27 am

John, Cobourg has a history of such. Consider Sidbrook!

Frenchy
Reply to  Ken Strauss
21 April 2020 9:32 am

…and the Park Theatre

Observer
Reply to  Frenchy
21 April 2020 10:48 am

The Park Theatre turned out to be a white elephant, A wounded white elephant, sitting empty, further deteriorating that no one wanted with the foundation or structural problems that came out.

Observer
Reply to  Observer
22 April 2020 6:46 pm

If the Park Theatre is not a wounded white elephant then what is it? No one wants it. It was sold until the structural problems came out then the sale was cancelled.

Observer
Reply to  Observer
22 April 2020 7:22 pm

The Park Theatre has sat there with no takers for a very long time with its well known structural issues. I say since in this very long time no one has offered to buy it with sale cancelled tear the place down and build something Cobourg needs with its exhorbitant rents – mixed housing for all – Full rent, market value and subsidized – provide homes not an empty deteriorating building. To down voter – so what would you describe the Park Theatre as – a wonderful investment with its structural problems? Look forward to your reply.

Observer
Reply to  Observer
22 April 2020 8:15 pm

Still looking for your reply down voter on why you don’t think after several years, a cancelled sale and the reports of structural problems you think the Park Theatre does not need to be torn down, or severely fixed with a price that reflects what needs done? Or shall it sit there forever rotting away? Your thoughts?

Observer
21 April 2020 6:25 am

I read FD Pharma was sold to another person and has been under new management for some time. It is foggy but I thought I read they were a publicly traded company and did not do at all well on the open market. Not surprised if they are changing their format and curtailing their operation.

Ken Strauss
Reply to  Observer
21 April 2020 9:21 am

Observer, they are part of FSD Pharma with a stock symbol of “HUGE”. HUGE has gone from over $50 per share to under $5 in the last 12 months. Not too surprising since last year they lost over $7 per share. Their detailed financial statements are on SEDAR. Suffice it to say that they have spent large amounts on consultants but almost nothing on production. Rather like Cobourg!

Curmudgeon
Reply to  Ken Strauss
21 April 2020 9:50 am

” Suffice it to say that they have spent large amounts on consultants but almost nothing on production. Rather like Cobourg!” Source or just rant?
Actually the entire pot industry is struggling.
“Despite losing over half its value during the last three quarters of 2019, the legal marijuana industry hasn’t exactly been a safe haven for investors during the COVID-19 pandemic. Several of the industries biggest names, in fact, have lost another third of their value since the start of 2020. ” https://www.fool.com/investing/2020/04/20/2-best-pot-stocks-to-buy-and-hold-for-the-next-10.aspx

Ken Strauss
Reply to  Curmudgeon
21 April 2020 10:12 am

” Suffice it to say that they have spent large amounts on consultants but almost nothing on production. Rather like Cobourg!” Source or just rant?

Curmudgeon, FACT. Check SEDAR (https://sedar.com/) for the details of FSD Pharma’s expenditures. Check any recent budget for Cobourg’s use of consultants.

Curmudgeon
Reply to  Ken Strauss
21 April 2020 10:24 am

Since you are the one in the know, perhaps you could oblige us with some numbers.
And you could explain to us, in the case of Cobourg, what you would consider ‘production’.

Ken Strauss
Reply to  Curmudgeon
21 April 2020 10:40 am

I consider “production” to be the things that towns are supposed to do: roads, water, sewer, etc. Not on consultants to circumvent the Municipal Act using a CIP. Not on consultants to determine that the marina needs expansion. Not on consultants to…

BTW, did you bother to verify my comments regarding FSD Pharma after I supplied a source?

Observer
Reply to  Ken Strauss
21 April 2020 10:45 am

Isn’t it the way everywhere? Consultants? Before the City of Toronto will move on anything they have consultants that they hire, the they hold endless consultations with neighbourhoods – except for safe injection sites, they just spring up. I am not defending the practice should Cobourg be doing it also but it seems many politicians are afraid to make any move because after they are roasted with innumerable second guessers and complaints in the media by someone suing.

Observer
Reply to  Ken Strauss
21 April 2020 10:53 am

Perhaps they were counting on profits from stock sales just like many of the other marijuana companies that have folded. Their revenues failed to materialize on the stock market that were meant to grow the business so to speak!

JimT
Reply to  Observer
21 April 2020 11:09 am

Companies don’t make “profits from stock sales”. The funds they get from share issues go into productive assets. If the shares rise in value, it’s the shareholders who bought the stock that gain. The company sold the shares long ago and gains nothing from a share price gain.

Observer
Reply to  JimT
21 April 2020 11:17 am

“The funds they get from share issues go into productive assets” – as lack of production is reported by other bloggers as the issue of FSD not producing I don’t understand your point Jim – please elaborate, thank you.

Observer
Reply to  Ken Strauss
22 April 2020 7:51 pm

Unfortunately for FSD Pharma they also had 43M in investment yanked that would kneecap them in any production Ken in a legal market that charges more for their product then the illegal market charged which is causing many such enterprises to fall through the floor. FSD is not alone and with a 43M yank in funds it is not surprising.

Observer
Reply to  Observer
21 April 2020 11:29 am

Apparently then their stock took a tumble kneecapping them. Jim T. states if the stock had been profitable the fund would have gone into productive assets. According to the chart kindly provided by Paul P. it states except for Thomas F. the insiders didn’t sell but he was able to pull out when the stock was still worth .65 before it dropped to .23. Apparently outside investors did not invest. The chances of the stock market. The chart Ken shows Inside Buyers and apparently the stock didn’t sell outside or the price would have gone up.

Ken Strauss
Reply to  Observer
21 April 2020 11:37 am

Observer wrote: “Apparently outside investors did not invest.” Insiders were net sellers so outside investors did invest.

Observer
Reply to  Ken Strauss
21 April 2020 11:44 am

It states no insiders sold for the recent period and these were not balanced with outside investors as insiders were the major investors.

Johanne
21 April 2020 12:03 am

They are making masks, gloves and gel distributors in Switzerland.

Canada imports so much from China time to be more creative than growing cannabis. What kind of national pride is that?

Cobourg used to have Toronto university and had nearly 200 graduates every year. Can’t we have research laboratories from a university? Great place !

Observer
Reply to  Johanne
21 April 2020 6:20 am

Interesting. I read that Victoria College voted to become part of University of Toronto in 1892 and left in that year for Toronto. What other facts do you have Johanne? Seems you don’t really like it here from what I read of your posts I am surprised you haven’t moved. I left my last place of residence due to all the changes – shootings for one, pest infestations in rental living – had to look high and low for a bug free building there, very high auto insurance rates and so forth.

Johanne
Reply to  Observer
21 April 2020 12:41 pm

Love my place and my beach, but yes what you mentioned is all here…. for a lot of you : after grade 12 and a factory life that’s it. Smoking pot is not a destination for me ! You should move to dreamland I am not light to move. . I travelled a lot so I can compare son. You should scrutinize the budget of your town instead. Can you contribute to your town, as much as I did ? and pay my heavy Toronto taxes? You need to have the right attitude and be positive, creative. BOYS WILL BE BOYS, change the culture, is even broadcasted , I see a lack of it.🗽

Frenchy
Reply to  Johanne
21 April 2020 1:35 pm

delete

Wally Keeler
Reply to  Frenchy
21 April 2020 2:18 pm

The usual arrogant response of censorshits.

Frenchy
Reply to  Wally Keeler
21 April 2020 2:54 pm

delete was a response (arrogant or otherwise)?
I deleted a comment as it was posted under the wrong topic.
Bored, looking for an argument?

Wally Keeler
Reply to  Frenchy
21 April 2020 3:28 pm

Delete suggests your instructions towards the preceding comment. Try using a different word if clarity is your problem. I once posted under a wrong topic and I deleted my comment. I did not leave the word delete behind like a dog leaving a pack on the side of a road. If that was the case, you would be more accurate to have used the word ‘deleted’.

Frenchy
Reply to  Wally Keeler
21 April 2020 4:24 pm

Well Wally, seeing as how you explain it so nicely and without name-calling 😉, I’ll try to remember that in the future.

Wally Keeler
Reply to  Frenchy
22 April 2020 2:26 pm

doubtful

Johanne
Reply to  Johanne
22 April 2020 9:10 pm

Ha! Ha! Ha !