I run the Sunniva Disco group full of snake oil salesmen, bag-holders, and pumpers galore (
(Sunniva Investor's Group Chat), and don't venture to the Stockhouse forums much as I don't find it the healthiest of places. However, having been given the privilege of talking to Leith today, I felt it a necessary obligation to do my best to inform the Sunniva investing public of what I learned. (Or as the shorts would say, to pump)
I called the number posted in the
Early Warning Report released yesterday in regards to Leith selling down from his 11.9% ownership to 9.9% and left a voicemail. About two hours later, Leith called me back. I am copying and pasting from what I wrote on the Sunniva Investor's Discord. For those not familiar with Sunniva, Leith Pedersen is the co-founder and former President of Sunniva.
Note: My goal was to have everyone’s concerns here addressed. Hopefully I achieved that.
Just got off the phone with Leith. Obviously it’s a bit difficult when you have a 100 questions you want to ask, and at the same time want to focus a hundred percent on what he’s saying. I did my best to address all concerns raised by everyone in the chat. He chose to speak with me in the hopes that I could get this message out to all of us and he wouldn’t need to make 50 more phone calls.
He’s been on the phone with institutional investors and big portfolio managers, trying to get to those guys first. These are my impressions after speaking with him for twenty minutes.
- His main motivation, and seemingly only reason for selling was to no longer be considered an “insider” and have to deal with that responsibility and requirement. His main goal was to get under 10% and he has achieved that. My impression from talking with him about it, since he can’t outright state that he’s done selling, is that he’s pretty much done selling. He wanted to be under 10% and now he is. If I had to bet my life on it, I’d say he doesn’t go under 9% any time soon. He said the timing of it was unfortunate, that it had to come at the downturn of the MJ sector, but it was necessary for him to do so in order to no longer be an insider.
-He mentioned like ehhtherekurt said, that he used algorithms for his selling. So he wasn’t forcing the trades, but going with the momentum and flow of the market. He was using both exchanges, the OTC and CSE.
- I asked him about his Linkedin and the whole fly fisherman thing. I said some here believe you are bitter and ended on a sour note with Sunniva and are out for revenge. He laughed a little and shot down that theory. Said he was going to make his title “Dad and Fly Fisherman.” He ended on good terms with the company and still believes in it. The company is changing gears both in location and in terms of execution. They are a manufacturing company now, and they need people with those expertise in the California area to push the company forward. This also applies to Negus stepping down.
-He is happy with all the recent hires, and is confident Wilkerson, Tony, Lyle and everyone else will achieve what they set out for when he and Tony originally founded the company.
-He continued to hearken back to ID Biomedical. He believes the parallels are there in terms of market reaction and business plan.
- When asked about the cash situation, he appeared very optimistic about the OK Falls sale and said he expects to hear something soon. He is in the dark, but those are his thoughts.
- I asked him why Sunniva didn’t plan to have the necessary funds to secure third party biomass in Q2 to help the positive quarterly growth, and whether that was a misstep by management. He gave the impression that management was expecting the sale of the Canadian asset/s to close in a more timely manner, and therefore did not raise capital. He thinks it prudent for them to not issue a raise unless necessary, and believes if OK Falls deal goes through, it won’t be. Also, potential sale of NHS on the horizon. So basically, they don’t want to dilute unless absolutely necessary. These deals don’t happen overnight and have been 4-6 months in the making.
- He said the main catalysts are the sale of the Canadian assets and the glasshouse being operational. He expects the glasshouse to be a pivot point for the company and will bring in analysts and coverage. Being able to show analysts what they’re doing, the plants, the extraction, the distribution (the whole vertical model) first hand, will be the catalyst that turns everything around.
-He believes Sunniva is very undervalued at the moment, but understands why. He didn’t use these words, but it’s basically show not tell. Once Sunniva is showing that it’s planting, harvesting, and selling, the narrative will change and the market will take notice.
-He kept hearkening back to ID Biomedical. Believes Sunniva will be just like it.
- I asked about Canaccord, and if he had any comment about their coverage. He said he can’t comment specifically on Cannacord, but analysts in general like to be right. So they’re not going to go out on a limb when it comes to coverage. He believes true coverage of Sunniva will come when the glasshouse is operational and the Canadian assets are sold. Until then, the coverage is merely superficial.
- I asked if he would like to join the Discord group and he said he’s trying to take a break. Spend time with his family and son. Fly fish, enjoy life, ect.
- I could tell he was probably over having to answer the same questions over and over with each phone call. I thanked him for his time and all he has done and wished he and his family the best.
- I got the impression that Leith is good guy, drained from the past couple of years, and in much need of a break. He still believes in Sunniva and the business plan. His constant reiteration of ID Biomedical tells me all I need to know. He brought in Tony Holler because of what Tony did there. He believed in this idea working in the cannabis sector and he still believes in it now. He sold his shares to get under 10% and no longer have the weight of being an “insider” on his mind and in his life. Unless he is a sociopath, Leith is as genuine as they come, and when Sunniva finally shines, I know he’ll be popping bottles of Kool-aid just like us.