SEC Investigating Ignite International for Fraud
A cannabis company led by social-media influencer Dan Bilzerian is under investigation by the U.S. Securities and Exchange Commission (SEC).
The agency issued a litigation release earlier this week, noting that it “has filed an action against Ignite International Brands, Ltd., a publicly traded company based in Ontario, Canada, seeking an order directing it to comply with an investigative subpoena for documents.”
Among other things, the SEC is investigating whether the Markham, Ont.-headquartered company violated the federal securities laws by making false or misleading statements in reporting its 2020 financial results.
The company has failed to produce requested documents, despite multiple accommodations from SEC staff, according to the release.
“The SEC is continuing its fact-finding investigation and, to date, has not concluded that any individual or entity has violated the federal securities laws,” the release adds.
The company, which sells a line of cannabis and CBD products, such as CBD-infused toothpicks, reportedly lost $67 million in 2019 and stayed afloat by raising money via debt and selling shares of the company’s stock, according to The Growth Op.
The company recently went private but was previously traded on the Canadian Securities Exchange under the ticker “BILZ.” In 2020, the company was trading for around 94 cents a share, down from a high of more than $5.
Last year, the company announced it was pulling out of the Canadian marijuana market, citing “too many barriers” to build a successful cannabis business.
“The government’s excessive restrictions of the marketing, sales and distribution of products has diminished the business opportunity while simultaneously making the consumer experience less than optimal,” Bilzerian said at the time.
During a shareholders meeting held on Aug. 24, 2022, Ignite shareholders approved a resolution to go private that was announced on July 19, 2022, and that the going private transaction has been completed, according to a press release.
