Executives at Advanced Cannabis Solutions on Tuesday described the recent temporary suspension of trading on the Colorado Springs company’s stock as an “enormous inconvenience,” but were optimistic trading will resume.
Last week’s stop-trade order by the U.S. Securities and Exchange Commission comes just three months after the startup landed up to $30 million in credit to help acquire properties to be leased to marijuana growers, which shot its stock up by 466 percent.
Advanced Cannabis Solutions shares, which last traded for $29.99, are up 823 percent for the year.
The SEC issued the order following questions over “whether certain undisclosed affiliates and shareholders (of ACS stock) engaged in unlawful distribution of securities” on the Over-the-Counter Bulletin Board and OTC Link.
The order is scheduled to be lifted April 9, the SEC said in a statement.
“It’s a big issue, especially for a company that was on a very positive trajectory,” CEO Robert Frichtel told The Denver Post in a telephone interview Tuesday. “In the purest business sense, this is an enormous distraction.”
Related: More coverage of investing in marijuana businesses and pot stocks
ACS shares held by company insiders are restricted from sale until August, Frichtel said, so it’s unlikely the SEC inquiry — about which the company has received no detailed information — is looking at them.
What could be in play are shares from ACS’s reverse-merger last summer with Promap Corporation in Centennial, a small oil-and-gas mapping business that acquired 94 percent of ACS in exchange for 12.1 million shares of Promap common stock, an 88 percent ownership stake.
Frichtel, 49, became CEO of Promap and Roberto Lopesino, 35, was appointed its vice president, according to SEC filings. Promap executives Steven Tedesco and Robert Carrington Jr. resigned.
That acquisition changed ACS’s business approach from mostly consulting to one of acquiring real estate to lease to marijuana growers and dispensary owners.
In January, investment company Full Circle Capital Corp. announced it had reached agreement with ACS to provide it $7.5 million in senior secured convertible notes.
The six-year obligation allowed for an additional $22.5 million, mostly backed by real estate.
David Migoya: 303-954-1506, dmigoya@denverpost.com or twitter.com/davidmigoya
