This investigative report just published in Swaziland News looks like it may well lead to killing a deal between US company Stem holdings and the king of Eswatini (formally Swaziland) King Mswati III.
The report alleges that King Mswati entered into a deal with Stem and then .. manipulated provisions of the Prevention of Organized Crime Act (POCA) by unleashing police officers on dagga (cannabis) farmers after Parliament refused to approve the Cannabis Bill.
The Swaziland News reports….. This publication sent further questions through the office of Mauria Betts, the Stem Holdings Director of Branding and Public Relations to seek some clarity on the project that has triggered a cold war in the country between the citizens and authorities, however, no responses has been received at the time of compiling this report.
ADAM BERK, CHIEF EXECUTIVE OFFICER
Former CEO of Osmio (now GrubHub), the first patented web-online food ordering system. A founder of HYD for Men, an artisanal men’s grooming company, Adam also founded PPI Co., which patented the first paper water bottle. A graduate of Cornell University with a degree in finance and hospitality, he also has an MBA from University of Miami.
(Source: Stem Website)
Before we get to the Swaziland News investigative report here is the full text of the Stem press release published
Stem Holdings, Inc. Enters the Global Cannabis & Industrial Hemp Market with acquisition of South African Ventures, Inc.
| Source: Stem Holdings, Inc
BOCA RATON, March 25, 2019 (GLOBE NEWSWIRE) — Stem Holdings, Inc. (OTCQB: STMH CSE: STEM) (the “Company” or “Stem”) is pleased to announce it has executed a definitive agreement dated March 22, 2019 to acquire South African Ventures, Inc. (“SAV”). SAV has a joint venture (the “JV”) with Profile Solutions, Inc. (OTC: PSIQ) and a working capital surplus of approximately C$11 million. The JV has received preliminary approval to become the only licensed growing farm and processing plant for medical cannabis and industrial hemp (the “Facility”) in The Kingdom of eSwatini f/k/a Swaziland (“eSwatini”) for a minimum of 10 years. The consideration for the acquisition of SAV is expected to be 8,250,000 common shares of Stem, having a value of approximately C$19 million based on Stem’s closing trading price on March 21, 2019. The acquisition of SAV is expected to be completed on or around March 29, 2019.
The JV is a corporate joint venture with its own management team and all of the personnel, expertise, and other resources necessary to construct the Facility. SAV has a 49% interest in the JV, which it purchased for an aggregate purchase price of $5,000,000. PSIQ holds the remaining 51% interest in the JV. Stem expects that the JV will finance the cost of construction of the Facility, estimated at $7,000,000, with the JV’s cash on hand and other non-dilutive sources of financing. Stem expects that the construction of the Facility will begin during the second quarter of 2019 and end during the fourth quarter of 2019.
Upon issuance of related permits and the construction of the Facility, the JV will: (1) operate an advanced hemp and medical cannabis manufacturing facility to grow and cultivate cannabis in accordance with strict Good Manufacturing Practices (“GMP”) global health standards; (2) distribute hemp and medical cannabis within eSwatini; (3) be the exclusive exporter within eSwatini for hemp and medical cannabis worldwide; (4) operate a medical cannabis research and development lab; and (5) build a training facility to create jobs for local eSwatini citizens.
Adam Berk, CEO of Stem stated “We are very excited to expand our cannabis and industrial hemp operations globally through our partnership with The Kingdom of eSwatini. Products produced at the eSwatini Facility will initially be available for export to countries including but not limited to Australia and the European Union.
“With the experience and success we have accomplished to date growing, cultivating, processing, extracting and distributing hemp and medical cannabis in the United States, this venture in eSwatini will be potentially accretive for our shareholders and rewarding for its citizens,” continued Adam Berk.
The eSwatini Facility will be located on 2,500 acres at The Science Park Matsapha for cannabis and industrial hemp cultivation and will adhere to strict GMP processing including a state-of-the-art research and development lab focused on genetic propagation. The implementation of this project is expected to have a positive impact on this incredible South African country by bringing new jobs and new infrastructure. The eSwatini Facility has the potential to produce over 12,000 KG of product on annual basis. Stem expects production from the Facility to begin during the fourth quarter of 2019.
Unlike many other cannabis businesses and opportunities, the joint venture has already secured access to water rights, electricity, and banking for this project. All security plans and operations for the eSwatini Facility will be developed and managed by Golan Maimon, former Israeli Chief of Military police from 2013 to 2016.
ABOUT THE KINGDOM OF ESWATINI
The Kingdom of eSwatini, f/k/a Swaziland, is a country in Southern Africa bordered by Mozambique and South Africa. eSwatini is a member of the Southern African Development Community (SADC), the African Union, the Commonwealth of Nations and the United Nations.
ABOUT PROFILE SOLUTIONS, INC.
Profile Solutions, Inc., through its subsidiary Elite Products International, Inc., is a leading distributor and manufacturer in the cannabinoid (CBD) industry. The Company’s products contain cutting-edge CBD industrial hemp extracts in the form of edibles, creams, oils and salves.
ABOUT STEM HOLDINGS, INC.
As a vertically integrated cannabis company, Stem has positioned itself as a pioneer in the industry with its state-of-the-art cultivation, processing, extraction, retail, and distribution operations. Stem owns cannabis facilities in Nevada, Oklahoma, and Oregon, and also participates in a research project in collaboration with Cornell University. Utilizing proprietary, sustainable cultivation techniques, Stem develops exceptional products that are safe and consist of lab-tested cannabis and CBD. Stem’s partner consumer brands are award-winning and nationally known, and include: cultivators, TJ’s Gardens and Yerba Buena; retail brands, Stem and TJ’s; infused product manufacturers, Cannavore and Supernatural Honey; and a CBD company, Dose-ology. Stem’s mission in supporting the health and happiness of people and the safety of our planet is evident through the Company’s continued recognition for its community involvement, employee diversification and a top place to work in cannabis, dedication to environmental causes and outstanding leadership in the cannabis industry.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING INFORMATION
This press release contains statements which constitute “forward-looking information” within the meaning of applicable securities laws, including statements regarding the plans, intentions, beliefs and current expectations of the management of Stem with respect to future business activities. Forward-looking information is often identified by the words “may”, “would”, “could”, “should”, “will”, “intend”, “plan”, “anticipate”, “believe”, “estimate”, “expect” or similar expressions and include information regarding: (i) the ability to construct and operate the eSwatini facility and the financing sources therefor; (ii) plans relating to the distribution of products from the JV; (iii) expectations regarding job creation in eSwatini; (iv) expectations for other economic, business, and/or competitive factors; (v) the purchase price and closing date for the SAV acquisition, together with expectations around the accretive nature of the JV to Stem’s shareholders; (vi) expectations around the exportation of products; and (vii) expectations around timing of the construction of the Facility and timing of the commencement of production from the Facility.
Investors are cautioned that forward-looking information is not based on historical facts but instead reflect the management of Stem’s expectations, estimates or projections concerning future results or events based on the opinions, assumptions and estimates of management considered reasonable at the date the statements are made. Although Stem believes that the expectations reflected in such forward-looking information are reasonable, such information involves risks and uncertainties, and undue reliance should not be placed on such information, as unknown or unpredictable factors could have material adverse effects on future results, performance or achievements of the Company. Among the key factors that could cause actual results to differ materially from those projected in the forward-looking information are the following: changes in general economic, business and political conditions, including changes in the financial markets; the ability of the Company to raise debt and equity capital in the amounts and at the costs that it expects; adverse changes in the public perception of cannabis; construction delays; decreases in the prevailing prices for cannabis and cannabis products in the markets that the Company operates in; adverse changes in applicable laws; adverse changes in the application or enforcement of current laws, including those related to taxation; the inability to locate and acquire suitable companies, properties and assets necessary to execute on the Company’s business plans; political risk; and increasing costs of compliance with extensive government regulation. This forward-looking information may be affected by risks and uncertainties in the business of Stem and market conditions.
Should one or more of these risks or uncertainties materialize, or should assumptions underlying the forward-looking information prove incorrect, actual results may vary materially from those described herein as intended, planned, anticipated, believed, estimated or expected. Although Stem has attempted to identify important risks, uncertainties and factors which could cause actual results to differ materially, there may be others that cause results not to be as anticipated, estimated or intended. Stem does not intend, and does not assume any obligation, to update this forward-looking information except as otherwise required by applicable law.
No securities regulatory authority has in any way passed upon the merits of the proposed transactions described in this news release or has approved or disapproved of the contents of this news release.
For further information, please contact:
Director of Branding and Public Relations
SWAZILAND NEWS INVESTIGATIVE REPORT
MBABANE: King Mswati allegedly entered into a multi-billion cannabis deal with Stem Holdings and subsequently manipulated provisions of the Prevention of Organized Crime Act (POCA) by unleashing police officers on dagga farmers after Parliament refused to approve the Cannabis Bill, threatening the existence of the now controversial project.
Stem Holdings is a giant company based in the United States specializing in cannabis and hemp branded products with proprietary capabilities in sustainable cultivation, processing, extractionas well as retail and distribution operations aligned with State-by-State regulations.
An independent investigation by this Swaziland News uncovered that on or around 2018 in the midst of escalating calls within the corridors of power to legalize dagga, local and international companies applied for the Cannabis license through the Ministry of Health but Stem Holdings allegedly approached royalty through the then Minister of Economic Planning and Development Prince Sihlangusemphi, a brother to King who was later appointed into a position within the army equivalent to that of Minister of Defense.
Reached for comments, Dr Simon Zwane, the Principal Secretary in the Ministry of Health confirmed that various companies applied for the license but said as a Ministry empowered by the law to regulate the industry, they opted to set the record straight that no company has been awarded the license after learning that Stem Holdings claimed to have received preliminary approval in the country to grow and export dagga products.
“We need to clarify and set the record straight that the Ministry of Health is empowered by the law to grant such licenses but to date, no license has been granted by the current or previous Minister to any company to grow or export dagga products” said the Principal Secretary.
When asked to respond to our questions on the subject matter, Prince Shlangusemphi, the then Minister of Economic Planning and Development who was allegedly instrumental in facilitating the dagga deal joined the fast lane, he failed to respond to a specific question about the alleged dealings with Stem Holdings.
But on or around 25thMarch 2019, Adam Berk, the Stem Holdings Chief Executive Officer(CEO) confirmed in a report and or a press release that his company, through a Joint Venture with Profile Solutions had received preliminary approval to become the only licensed growing farm and processing plant for medical cannabis and industrial hemp in eSwatini for a period of ten (10) years.
“Stem Holdings Inc. is pleased to announce it has executed a definitive agreement dated March 22, 2019 to acquire South African Ventures Inc. SAV has a joint venture with Profile Solutions and a working capital surplus of approximately $11 million. The JV has received preliminary approval to become the only licensed growing farm and processing plant for medical cannabis and industrial hemp in The Kingdom of eSwatini (formerly known as Swaziland) for a minimum of 10 years” said Adam Berk, in an article that was also published by the Cannabis Business Times.
This publication sent further questions through the office of Mauria Betts, the Stem Holdings Director of Branding and Public Relations to seek some clarity on the project that has triggered a cold war in the country between the citizens and authorities, however, no responses has been received at the time of compiling this report.
Reached for comments, Saladin Magagula, the Chairman of the Eswatini Cannabis Association (ECA) said as representatives of dagga farmers, they don’t want the industry to be captured by white monopoly capitalism.
“As much as we support Foreign Direct Investment, we don’t want white monopoly capitalism to completely take over the business from indigenous Swazis. We want everything to be grown and processed here, even if we involve investors, at least the growing part should be done by the citizens” said the Cannabis Associations Chairman.
But royal insiders told this publication that shortly after Parliament rejected the Cannabis Bill whose intention was to legally award Stem Holdings the license, Prime Minister Ambrose Dlamini and Justice Minister Pholile Shakantu subsequently, manipulated provisions of the Prevention of Organized Crime Act(POCA) to target dagga farmers and MPs were flooded with complaints from the public to intervene.
Parliament documents in our possession suggests that on or around the 20thJuly 2020, Mduduzi ‘Bacede’ Mabuza, the Hosea Member of Parliament citing a clear conflict of interest, registered a motion without notice with the office of Speaker Petros Mavimbela calling upon the Justice Minister Pholile Shakantu to prepare a Bill that seeks to amend certain sections of the Prevention of Organized Crime Act(POCA) No 11 of 2018 to address among others, the selective targeting of a group of citizens, this resulted to the suspension of POCA through a Parliament resolution.
An independent investigation further uncovered that apart from the King and influential members of the royal family, senior Cabinet members with direct interest in the dagga deal and acquisition of the dagga license successfully lobbied few MPs to support the project, however, they were overpowered by the majority within House.
On or around 24 July 2020, subsequent to a ‘hot’ debate in the House of Assembly over POCA and a report by this publication exposing how Justice Minister Pholile Shakantu attempted and failed to intimidate MPs to reverse the resolution, Prime Minister Ambrose Dlamini acting possibly in contempt of Parliament, subsequently called a press conference and overruled the House.
“It is important to state, and the parties accepted that Parliament Constitutional mandate excludes the suspension of any legislation that has been passed into Act. Parliament can only reject or amend a Bill and not suspend an Act” said the Prime Minister.
When reached for comments by this publication, Sifiso Khumalo described the decision by Parliament to suspend POCA as an attack to the rule of law adding that this might result to negative effects for the country at international level.
“I made my position clear on this matter in Parliament but it’s important to understand that Parliament is not above the Constitution and we must guard against an attack to the rule of law, something that might result to negative effects for the country at international level” said the Principal Government Legal Adviser.
But a separate independent investigation uncovered that on the very same day, Friday, 24 July 2020, while PM Ambrose Dlamini was addressing the media on the subject matter, former Senate Deputy President Ngomyayona Gamedze was holding a meeting with senior police officers at Matsapha, political insiders alleged that the law enforcement had been commanded to gather information to disqualify businessman Sifiso Mabuza from the race to Senate.
Reached for comments by this publication, the former Senate Deputy President who withdrew from the race to Parliament confirmed attending the said meeting but said he was asked simple questions.
“What is the angle of your story because I am not involved in this, my meeting with the police was not to fight any candidate. They asked me simple questions and I didn’t even record a statement” said the former Senate Deputy President.
Responding to further questions, Gamedze said Sifiso Mabuza was not an MP adding that he had nothing against him as he was also desperate for votes.
“Mabuza is not an MP, I have nothing against him, ‘’angimati’’, I couldn’t even approach him as he was like me, desperate for votes” he said.
But on or around 29 July 2020, a battalion of police officers from the highest investigation unit, Tingculungculu invaded two homes of businessman Sifiso Mabuza, harassed his family and tenants, in what the police described as a vetting process for the Senate candidate who was earlier cleared to stand for the elections.
MP Mduduzi ‘Bacede’ Mabuza, the powerful and politically connected legislator was quoted by the Times of Eswatini confirming that the harassment of his brother had nothing to do with the vetting but was triggered by the ‘hottest’ matters that were discussed in Parliament.
“This has nothing to do with my brother, but he is suffering because of my involvement over the hottest matters that were discussed in Parliament” said the MP.
Reached for comments by this Swaziland News, Themba Msibi, the former Speaker in the House of Assembly now Regional Administrator for the Lubombo region said even though vetting forms part of the elections process in the country, the vetting of Senate candidate Sifiso Mabuza leaves for more questions.
“Vetting forms part of the process for elections but it has never happened that a person be vetted while the elections were already in progress, this is new and more questionable. However, I can’t comment further as I am not close to the matter, maybe the police can explain this” said the former Speaker in the House of Parliament.
Superintendent Phindile Valakati, the Eswatini Police Spokesperson had not responded to our questions at the time of compiling this report, she also refused to divulge further information as reported by the Eswatini Observer, however, she confirmed that they were carrying on-going investigations on the Senate candidate for a case “they will not publicly disclose because that could compromise their case in a court of law”.
On or around 15 July 2020, The GrowthOp, an international Online publication specializing on cannabis news among others, quoting a report from this Swaziland News and the Times of Eswatini reported that Eswatini cannabis growers were threatening to burn sugar-cane fields in retaliation against government crackdown.
Analyses of the Bill suggests that in the event Parliament approves it in its current form, it will mark an end for the dagga farmers as citizens will face harsh sentences and fines amounting to E250,000.00, with possibilities of converting those with experience into cheap laborers for the capitalists.
But Adam Berk, the Stem Holdings CEO stated in the report and or a press release dated 25 March 2019 that was also shared to the company’s shareholders that the project was to commence with the construction of a facility to be situated within the Royal Science Technology Park in the second quarter of last year, 2019 and be completed in the fourth quarter of the same year.
The Joint Venture was highly expected to fund the construction of the facility at an estimated value of about E100million and it could not be ascertained whether the money had already been transferred to royalty at the time of compiling this report but insiders said government remains under pressure to speed-up the process of convincing Parliament to approve the Cannabis Amendment Bill.
“The eSwatini facility will rise on 2,500 acres at The Science Park Matsapha. The venture will fund the estimated $7.0 million construction cost of the facility using cash on hand and other non-dilutive sources of financing. The facility is expected to break ground in the second quarter and be finished in the fourth quarter” said the Stem Holdings CEO.
Swaziland News have also followed up their initial article with a piece entiled
Political tension looming as angry MPs vow to elect businessman Sifiso Mabuza into Senate
LOBAMBA: Angry Members of Parliament (MPs) vow to elect businessman Sifiso Mabuza into Senate despite the harassment he was subjected to by the police as the tension between Parliament and those in power over the alleged abuse of the Prevention of Organized Crime Act (POCA) to target dagga farmers intensify.
This comes after a highly investigative article by this Swaziland News that exposed how King Mswati allegedly entered into a dagga deal with Stem Holdings, a company based in the United States and subsequently unleashed police officers on the dagga farmers triggering tension between Cabinet and Parliament after citizens complained to their various MPs that they were being targeted.
Read more at the link