Pubdate: Thu, 29 Oct 2015
Source: Toronto Sun (CN ON)
Copyright: 2015 Canoe Limited Partnership
Author: Aedan Helmer
Page: 3


Liberal CFO could rake in marijuana money with legalization

He may volunteer in his role as chief financial officer with the
Liberal Party of Canada, but Chuck Rifici is in line for a big pay
day, thanks to one of the party's key platforms.

Rifici, who has been a member of the Liberal national board of
directors since 2011, is also the co-founder of Tweed Marijuana Inc.,
Canada's biggest full-scale producer of government-sanctioned pot
producer, which is based in Smiths Falls, Ont.

"I'm simply a shareholder," said Rifici in an e-mail to the Sun on

In the midst of the recent election campaign, Rifici branched out with
two new ventures.

He was named director of the only licensed medicinal marijuana grower
in Alberta, and launched a new company that seeks to cash in on the
legal marijuana trade in the U.S., where business is booming.

The sum of his work in the industry has critics suggesting his cozy
relationship with the governing party could constitute a conflict of
interest, especially if any of his private business interests are
rewarded with fat contracts once new marijuana legislation is passed.

Rifici brushed off concerns about his political connections.

"As for my volunteering as CFO (of) the Liberal Party, I have no role
in policy making nor in policy decisions, no role in the transition,
no future role in government and, as incorrectly previously reported,
I am not an adviser to Justin Trudeau nor am I close to him," he said.

Rifici had come under fire a year ago while serving both as CFO of the
party and CEO of Tweed, with a spokesman for former public safety
minister Steven Blaney telling Postmedia that legalization "would
benefit Mr. Trudeau's close millionaire friends that are marketing
marijuana to Canadians."

Rifici stepped down as Tweed CEO, insisting at the time the move had
nothing to do with political connections.

However he is still listed as the single largest shareholder.

While Tweed currently deals strictly in medicinal cannabis, the
operation is poised to expand its reach if Trudeau follows through on
his campaign pledge to legalize recreational marijuana.

Rifici is already richer -- by nearly $5 million -- since election

With 7.8 million shares to his name in the newly renamed Canopy Growth
Corp., Rifici watched the once-slumping stocks soar in the days
following the election.

Shares that were trading at $2 at the opening bell on Oct. 19 spiked
to $2.58 by week's end, with the value of Rifici's stake in the
company jumping from $15 million to $20 million overnight.

But the Liberal party denied any conflict of interest in an emailed
statement that closely resembled Rifici's own.

A party spokesman said Rifici's role "consists strictly of assisting
the board on finance-related matters," and that he has no role in
policy decisions, with "thousands" of Liberals adopting the resolution
to legalize and regulate marijuana at the party's January 2012 convention.

"Our official position is rooted in the democratic will of our members
and has nothing to do with Mr. Rifici's personal views on the matter,"
said spokesman Olivier Duchesneau.

Health Canada expects the number of Canadians using medicinal
marijuana to rise tenfold, to 450,000 people, over the next decade.

Companies such as Canopy, though, are eyeing a much more lucrative

"We're excited about where we're sitting, because we are the biggest
production platform in Canada, and probably in the world for legally
available marijuana," said current Canopy CEO Bruce Linton, whose
three growhouses in Smiths Falls, Toronto and Niagara are ready and
waiting for the green light to open the supply lines to a vast
recreational marijuana market.

"We have 500,000 square feet of production facility, which is, by any
account, an awful lot. And so we feel kind of like the next race is
starting, and all this effort and building and acquisition and
construction -- it's a race and that puts us in the pole position."

It's put Rifici in a good position right from the firing of the
starting gun.

In August, Rifici was named to the board of directors at Aurora
Cannabis Inc., a Western Canada marijuana grower with similar

And in September, with the election campaign in full sway, Rifici
launched Nesta Holding Co., an investment firm specializing in
"acquiring, cultivating and monetizing cannabis businesses for the
U.S. market."

Several American jurisdictions have already legalized marijuana.
Massive commercialization of the product in Colorado netted an
estimated $700 million in revenue from recreational marijuana in 2014

Meanwhile, medicinal marijuana prescriptions in the state have
tripled, attributed to the social acceptance that comes along with

Health Canada has estimated the medicinal marijuana market could be
worth $1.3 billion in Canada in 10 years, and those estimates predate
Trudeau's legalization pledge. There have been no reliable estimates
on how much the recreational market might be worth if legislators end
prohibition and regulate the drug in a manner similar to alcohol.

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Smoking Out a Conflict of Interest

If the Liberals legalize marijuana for recreational use, it should be
done under the gaze of an "integrity monitor" to avoid any potential
conflicts of interest, says a noted political watchdog.

Duff Conacher, co-founder of Democracy Watch and a visiting professor
of political science at the University of Ottawa, said the close
relationship between the Liberals and their chief financial officer,
Chuck Rifici - one of Canada's leading pot entrepreneurs - could be
problematic because of the "appearance of a conflict of interest."

Conacher said Rifici's four years volunteering as CFO could be seen as
providing a "favour" to the party.

"Now, if he was to be asking for a favour in return, that would create
the conflict of interest," said Conacher.

"Whatever (the Liberals) do in terms of legalization, it's essentially
handing a contract - they're setting the terms for all these
businesses to operate under a regulatory regime. They have to ensure
the policy they've promised to implement is done in a way that fully
upholds the public interest and does not protect any private interest
that they have ties to."

Conacher said an integrity monitor, appointed either by either the
ethics commissioner or the auditor general, would ensure "nothing is
being done that favour (Rifici's) companies in particular."
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