The Palm Springs Desert Sun newspaper provides the details and we thank them for the detail.
In April, the Securities and Exchange Commission charged Peter Pocklington – a Palm Desert resident, convicted felon and former owner of the Edmonton Oilers hockey team – with fraud.
Three months later, Pocklington is planting the seeds for a new local business: Growing cannabis.
The SEC sued Pocklington and related entities on April 5, alleging the group defrauded investors while raising money for Nova Oculus Partners LLC, an Indian Wells-based medical device startup developing a treatment for macular degeneration.
Pocklington has faced accusations of securities fraud before. In 2013, the Arizona Corporation Commission ordered him to pay $5.1 million restitution in a settlement related to a gold mining venture, Crystal Pistol Resources LLC. And in 2010, he pleaded guilty to felony perjury.
Now the one-time sports franchise owner has emerged at the center of a new venture seeking to put down roots in the Coachella Valley: Magic Dragon Realty LLC, a company setting out to grow cannabis at an undisclosed location in the Coachella Valley.
On June 12, the company filed a document with the SEC showing it intends to raise as much as $12.5 million from investors – and identifying Pocklington as Magic Dragon’s manager.
Magic Dragon has also launched a website, www.themagicdragonrealty.com, where it outlines plans to wholesale medicinal cannabis throughout California. It projects annual revenue will exceed $55 million in five years.
But according to cannabis industry data as well as interviews with marijuana growers and consultants, Magic Dragon’s financial predictions appear overly optimistic. The company could also face substantial regulatory hurdles – both in financing its project and obtaining cannabis business licenses – because of Pocklington’s prior felony and securities fraud charge.
Magic Dragon representative John McNeil, said by phone the company was too early in its development to discuss its plans, and would not answer further questions. In an email, Pocklington referred questions about Magic Dragon to Damian Gerry, the company’s Vice President and Co-Founder.
Gerry defended Pocklington as “an amazing individual” dedicated to finding a cure for macular degeneration through his company, Nova Oculus.
“Everybody who’s in their 70s, especially with being a businessman, is going to have a crazy past,” Gerry said.
Gerry said Magic Dragon will raise $2 million from investors immediately and an additional $10.5 million in the future – all of which would go toward funding company investments and operations. He said the company’s financial projections simulate a “worst case scenario,” assuming a wholesale price of $2,000 per dry pound of cannabis flower.
Gerry declined to answer follow-up questions.
According to its website, Magic Dragon plans to grow 20,000 plants concurrently in a 20,000-square-foot facility.
Mike Rowe, a Director of Business Development at MSA Consulting Inc., which has managed the development of over 35 cannabis cultivation projects, said the plan doesn’t make logistical sense.
“There’s no way you’re going to get that many plants into a room,” Rowe said. “Not all at once.”
Rowe and George Verstraete, a cannabis grower in Desert Hot Springs, are also skeptical of the company’s financial projections, because they think the company is underestimating expenses.
Plenty about his colorful past in Wikipedia
In September 2013, a judge in Riverside, east of Los Angeles, sentenced Pocklington to six months in prison followed by a further six months of house arrest for breaching his probation on a perjury conviction related to a bankruptcy fraud case.
The court heard evidence that Pocklington, over a 19-month period, failed to disclose hundreds of thousands of dollars of “consulting” fees paid to a company controlled by his wife, Eva. The money came from gold mine, stock promotion companies owned by Pocklington.
The businessman appealed the ruling. On Thursday, a three-member appeals panel ruled the lower court had failed to abide by requirements which prohibit the extension of probation, after the term of probation has expired, unless a warrant or summons is issued before the original probation has ended. No warrant or summons was issued in the Pocklington case until after his probation had expired.
Here’s the Magic Dragon filing...