Pubdate: Thu, 29 Oct 2015
Source: Ottawa 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 Wednesday.

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 day.

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 market.

"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 aspirations.

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 alone.

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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MAP posted-by: Jay Bergstrom