{"id":503507,"date":"2022-10-25T02:37:00","date_gmt":"2022-10-24T23:37:00","guid":{"rendered":"https:\/\/en.buradabiliyorum.com\/cannabis-watch-sec-makes-second-move-in-a-week-against-a-once-hyped-pot-stocks-former-executive\/"},"modified":"2022-10-25T02:37:00","modified_gmt":"2022-10-24T23:37:00","slug":"cannabis-watch-sec-makes-second-move-in-a-week-against-a-once-hyped-pot-stocks-former-executive","status":"publish","type":"post","link":"https:\/\/buradabiliyorum.com\/en\/cannabis-watch-sec-makes-second-move-in-a-week-against-a-once-hyped-pot-stocks-former-executive\/","title":{"rendered":"#Cannabis Watch: SEC makes second move in a week against a once-hyped pot-stock\u2019s former executive"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_85 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6a3dbe048fb27\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #dd3333;color:#dd3333\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #dd3333;color:#dd3333\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6a3dbe048fb27\" checked aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-1'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/buradabiliyorum.com\/en\/cannabis-watch-sec-makes-second-move-in-a-week-against-a-once-hyped-pot-stocks-former-executive\/#%E2%80%9CCannabis_Watch_SEC_makes_second_move_in_a_week_against_a_once-hyped_pot-stocks_former_executive%E2%80%9D\" >&#8220;Cannabis Watch: SEC makes second move in a week against a once-hyped pot-stock\u2019s former executive&#8221;<\/a><ul class='ez-toc-list-level-2' ><li class='ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/buradabiliyorum.com\/en\/cannabis-watch-sec-makes-second-move-in-a-week-against-a-once-hyped-pot-stocks-former-executive\/#SEC_announces_settlement_with_Cronos_Group_and_its_former_chief_commercial_officer_a_week_after_accusing_former_NewAge_CEO_Brent_David_Willis_of_a_%E2%80%98multiyear_fraud\" >SEC announces settlement with Cronos Group and its former chief commercial officer a week after accusing former NewAge CEO Brent David Willis of a &#8216;multiyear fraud&#8217;<\/a><ul class='ez-toc-list-level-4' ><li class='ez-toc-heading-level-4'><ul class='ez-toc-list-level-4' ><li class='ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/buradabiliyorum.com\/en\/cannabis-watch-sec-makes-second-move-in-a-week-against-a-once-hyped-pot-stocks-former-executive\/#Bill_Peters\" >Bill Peters<\/a><\/li><\/ul><\/li><\/ul><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<h1><span class=\"ez-toc-section\" id=\"%E2%80%9CCannabis_Watch_SEC_makes_second_move_in_a_week_against_a_once-hyped_pot-stocks_former_executive%E2%80%9D\"><\/span>&#8220;Cannabis Watch: SEC makes second move in a week against a once-hyped pot-stock\u2019s former executive&#8221;<span class=\"ez-toc-section-end\"><\/span><\/h1>\n<h2 class=\"article__subhead\" itemprop=\"alternativeHeadline\"><span class=\"ez-toc-section\" id=\"SEC_announces_settlement_with_Cronos_Group_and_its_former_chief_commercial_officer_a_week_after_accusing_former_NewAge_CEO_Brent_David_Willis_of_a_%E2%80%98multiyear_fraud\"><\/span>\n  SEC announces settlement with Cronos Group and its former chief commercial officer a week after accusing former NewAge CEO Brent David Willis of a &#8216;multiyear fraud&#8217;<br \/>\n<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><\/p>\n<div class=\"column column--full article__content\">\n<div class=\"article__side\">\n<div class=\"container--sticky not-active\">\n<div id=\"cx-next\" data-nosnippet>\n              <\/div>\n<\/p><\/div>\n<\/p><\/div>\n<div id=\"js-article__body\" class=\"article__body article-wrap at16-col16 barrons-article-wrap crawler\" itemprop=\"articleBody\" data-sbid=\"WP-MKTW-0001316507\" role=\"document\">\n<div class=\"barrons-article-ad-wrapper\">\n<div data-track=\"barrons-article-ad-wrap\" class=\"barrons-article-ad sticky_item\">\n<div class=\"barrons-main-article-ad-target sticky_target body_ad\" aria-hidden=\"true\"><\/div>\n<\/p><\/div>\n<\/p><\/div>\n<div data-layout=\"\n                inline\" data-layout-mobile=\"\" class=\"\n          media-object\n          type-InsetArticleReader\n              \n              inline\n  article__inset\n          article__inset--type-InsetArticleReader\n              article__inset--inline\n  \"><\/p>\n<div class=\"media-object-article-reader\">\n<div class=\"audioplayer\" data-sbid=\"WP-MKTW-0001316507\" role=\"region\" aria-label=\"Listen to Article\" tabindex=\"-1\" id=\"articlereader\" data-show-title=\"false\" data-theme=\"wsj-article-reader\" data-show-header=\"false\" data-show-subscribe=\"false\" data-ads-enabled=\"true\" data-save-publication=\"false\">\n        <\/div>\n<\/p><\/div>\n<\/p><\/div>\n<p>       The Securities and Exchange Commission on Monday charged Canadian pot producer Cronos Group Inc. and a former executive with accounting fraud, accusing them of improperly booking sales and overstating revenue by millions of dollars. <\/p>\n<p> Cronos Group<br \/>\n        CRON,<br \/>\n        <bg-quote field=\"percentchange\" format=\"0,000.00%\" channel=\"\/zigman2\/quotes\/206842762\/composite\" class=\"\"><\/bg-quote><br \/>\n        CRON,<br \/>\n        <bg-quote field=\"percentchange\" format=\"0,000.00%\" channel=\"\/zigman2\/quotes\/202715342\/delayed\" class=\"positive\">+0.75%<\/bg-quote><br \/>\n       and its former chief commerce officer \u2014 William Hilson, who left the company at the end of 2019 \u2014 agreed to settle the matter without admitting or denying the SEC\u2019s findings, the agency said. Shares of the company fell 2.4% after hours. <\/p>\n<div class=\"paywall\">\n       The move by the regulator marks the second time in a week that it has filed charges related to a company that was swept up in a pot-stocks craze around the time that Canada became the first industrialized nation to legalize marijuana for recreational purposes. And it follows questions surrounding Cronos\u2019s accounting protocols that cropped up more than two years ago. Cronos and Hilson also settled similar allegations from Canadian regulators.<\/p>\n<p><strong>See also: Former CEO of NewAge, a drink company that shot to pot-stock fame, accused by SEC of \u2018multiyear fraud\u2019<\/strong><\/p>\n<p>Cronos Chief Executive Mike Gorenstein, in a statement, said he was \u201cpleased to have resolved these matters.\u201d Tobacco giant Altria Group Inc.<br \/>\n        MO,<br \/>\n        <bg-quote field=\"percentchange\" format=\"0,000.00%\" channel=\"\/zigman2\/quotes\/208895754\/composite\" class=\"positive\">+2.09%<\/bg-quote><br \/>\n      \u2014 which owns more than 40% of Cronos and is its biggest shareholder \u2014 referred inquiries to Cronos. <\/p>\n<p>The SEC alleged that across three quarters between 2019 and 2021, Cronos \u201csubmitted financial statements with the SEC that contained material accounting errors related to, among other things, revenue recognition and goodwill impairment.\u201d <\/p>\n<p>The agency also found that Hilson, in one of those quarters, made an oral agreement to sell \u201ccannabis raw material and to repurchase cannabis product in the following quarter\u201d \u2014 a $2.3 million oversight that \u201cwas neither known nor accounted for by Cronos.\u201d<\/p>\n<p>However, the SEC said, Cronos quickly reported the alleged misconduct \u2014 the company restated its 2019 financial information in early 2020 after delaying its annual review for an internal inquiry. And the company cooperated with the agency\u2019s investigation \u2014 which was first reported by MarketWatch \u2014 and took steps to improve its accounting protocols, the SEC said.  <\/p>\n<p><strong>For more: Cronos paid $300 million for a small CBD company, and CEO\u2019s private-equity firm stands to collect $120 million of it<\/strong><\/p>\n<p>\u201cWhile today\u2019s order finds that Cronos\u2019s controls were not up to standards when it began filing financial statements with the SEC, Cronos avoided penalties by promptly self-reporting its accounting misconduct as it came to light within the company, cooperating with our investigation, and promptly taking effective re<a href=\"https:\/\/buradabiliyorum.com\/en\/category\/social-mediaa\/\" data-internallinksmanager029f6b8e52c=\"1\" title=\"Social Media\" target=\"_blank\" rel=\"noopener\">media<\/a>l steps,\u201d Mark Cave, \u00a0associate director in the SEC\u2019s Enforcement Division, said in a statement. <\/p>\n<div id=\"cx-membership-tile\"><\/div>\n<p>The SEC said that Cronos agreed to cease and desist from future violations, and to retain a consultant to review and make recommendations surrounding its accounting controls, the SEC said. <\/p>\n<p>Hilson, the agency said, agreed to a three-year ban from being an officer or director for any company with registered securities and reporting requirements under parts of the Exchange Act. He also agreed to a minimum three-year suspension from practicing before the SEC as an accountant. <\/p>\n<p>Last week, the SEC accused former NewAge Inc.<br \/>\n        NBEVQ,<br \/>\n        <bg-quote field=\"percentchange\" format=\"0,000.00%\" channel=\"\/zigman2\/quotes\/200595917\/composite\" class=\"\"><\/bg-quote><br \/>\n       Chief Executive Brent David Willis of a \u201cmultiyear fraud\u201d that included misleading public statements meant to promote the wellness beverage maker, which once pitched itself as primed to capitalize on CBD drinks. <\/p>\n<p>Hilson was Cronos\u2019s chief financial officer from October 2016 to April 2019. He then worked as its chief commerce officer from April 2019 to December 2019.<\/p>\n<p>During part of that time in 2019, Cronos \u2014 which is much smaller than some of its Canadian rivals \u2014 was trying to aggressively expand into the vaping market, the SEC said. But its ambitions ran up against an insect infestation that s<a href=\"https:\/\/buradabiliyorum.com\/en\/category\/download-scripts-themes-apps\/\" data-internallinksmanager029f6b8e52c=\"9\" title=\"Download Scripts &amp; Themes &amp; Apps\" target=\"_blank\" rel=\"noopener\">app<\/a>ed quality supply. They also ran into limited production resources and accounting inexperience as the company tried to work with third-party operators to use up the compromised crop, secure resin to make vapes and boost flagging sales.\u00a0\u00a0<\/p>\n<p>\u201cDuring this time period, there were a limited number of third-party firms in Canada that either had the capacity to purchase Cronos\u2019 lower-quality biomass and convert to other uses, or the ability to supply resin to Cronos for use in vaporizer cartridge production,\u201d the SEC said. \u201cCronos considered its dealings with such third-party firms to be part of its wholesale channel.\u201d<\/p>\n<p>The accounting oversights, the SEC said, stemmed from whether sales should be recognized on transactions with two companies. One of those companies sold resin to Cronos or bought crops from it. Cronos and the other company agreed to source raw materials together, and that company would handle making vape cartridges and converting cannabis bud into resin, the SEC said.<\/p>\n<p>The SEC also focused on an impairment surrounding Cronos\u2019s acquisition of a U.S. company that makes CBD products under the name Lord Jones. That business, the SEC said, faced \u201can approximate 60% decrease in projected revenues in future years,\u201d according to an internal forecast prepared in the second quarter of last year, amid competition and discounting from rivals.\u00a0<\/p>\n<p>\u201cAs a result of such information, Cronos should have determined that it was required to perform an interim impairment test,\u201d the SEC said. \u201cHowever, Cronos\u2019s internal accounting controls were insufficient to provide reasonable assurances that an appropriate impairment analysis was conducted in the second quarter of 2021.\u201d\u00a0\u00a0\u00a0\u00a0\u00a0<\/p>\n<p>Cronos Group bought Lord Jones for $300 million in 2019. MarketWatch at the time reported that the price of the deal was equal to 75 to 150 times Lord Jones\u2019 2018 sales. Gotham Green Partners, a private-equity fund co-founded by Gorenstein, paid $12.8 million for a 40% stake in Lord Jones, MarketWatch reported.<\/p><\/div>\n<\/div><\/div>\n<p><\/p>\n<div class=\"byline article__byline\">\n<p>    <span>By<\/span><\/p>\n<div class=\"author mobile-scrim hasMenu\" data-scrim='{\"type\":\"author\",\"header\":\"Bill Peters\",\"subhead\":\"The Wall Street Journal\",\"list\":[{\"type\":\"link\",\"icon\":\"bio\",\"url\":\"https:\/\/www.marketwatch.com\/topics\/journalists\/bill-peters\",\"text\":\"Biography\"},{\"type\":\"link\",\"icon\":\"twitter\",\"url\":\"https:\/\/twitter.com\/billwpeters\",\"text\":\"@billwpeters\"},{\"type\":\"link\",\"icon\":\"email\",\"url\":\"http:\/\/www.marketwatch.com\/news\/mailto:bpeters@marketwatch.com\",\"text\":\"bpeters@marketwatch.com\"}]}' itemscope itemprop=\"author\" itemtype=\"http:\/\/schema.org\/Person\">\n<h4 itemprop=\"name\"><span class=\"ez-toc-section\" id=\"Bill_Peters\"><\/span>Bill Peters<span class=\"ez-toc-section-end\"><\/span><\/h4>\n<p><ufc-follow-author-widget product=\"marketwatch\" author-id=\"278_MW\" author-name=\"Bill Peters\" signin-url=\"https:\/\/accounts.marketwatch.com\/login?target=https%3A%2F%2Fwww.marketwatch.com%2Fstory%2Fsec-makes-second-move-in-a-week-against-a-once-hyped-pot-stocks-former-executive-11666651566%3Frss%3D1%26siteid%3Drss\" panda-api=\"https:\/\/follow-api.marketwatch.com\"><\/ufc-follow-author-widget><\/p><\/div>\n<\/div>\n<p><script async src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script><\/p>\n<blockquote><p><strong><span style=\"color: #ff6600;\">If you liked the article, do not forget to share it with your friends. Follow us on\u00a0<span style=\"color: #ff0000;\"><a style=\"color: #ff0000;\" href=\"https:\/\/news.google.com\/publications\/CAAqBwgKMLG0nwswvr63Aw\" target=\"_blank\" rel=\"nofollow noopener noreferrer\">Google News<\/a><\/span>\u00a0too, click on the star and choose us from your favorites.<\/span><\/strong><\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\">For forums sites go to <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/forum.buradabiliyorum.com\/\" target=\"_blank\" rel=\"noopener\">Forum.BuradaBiliyorum.Com<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\"><strong>If you want to read more <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/news\/\" data-internallinksmanager029f6b8e52c=\"2\" title=\"News\" target=\"_blank\" rel=\"noopener\">News<\/a> articles, you can visit our <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/en.buradabiliyorum.com\/news\/\" target=\"_blank\" rel=\"noopener\">News category.<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<p><span style=\"color: black;\"><a style=\"color: #ff9900;\" href=\"http:\/\/www.marketwatch.com\/news\/story.asp?guid=%7B20C06575-04D4-B545-7141-69BE8852CB59%7D&#038;siteid=rss&#038;rss=1\" target=\"_blank\" rel=\"noopener\">Source<\/a><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>&#8220;Cannabis Watch: SEC makes second move in a week against a once-hyped pot-stock\u2019s former executive&#8221; SEC announces settlement with Cronos Group and its former chief commercial officer a week after accusing former NewAge CEO Brent David Willis of a &#8216;multiyear fraud&#8217; The Securities and Exchange Commission on Monday charged Canadian pot producer Cronos Group Inc&#8230;.<\/p>\n","protected":false},"author":1,"featured_media":503508,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"https:\/\/images.mktw.net\/im-650916\/social","fifu_image_alt":"","footnotes":""},"categories":[70897],"tags":[],"class_list":["post-503507","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news"],"_links":{"self":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/503507","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/comments?post=503507"}],"version-history":[{"count":0,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/503507\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media\/503508"}],"wp:attachment":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media?parent=503507"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/categories?post=503507"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/tags?post=503507"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}