Two weeks in sunny (wintery) Australia was a nice recharge, what with the last two summers being too busy to take time off. Coming home over the weekend I wondered if I’d missed anything on the markets, only to find the answer was no. Nothing had happened. Bupkis.
This morning, Golden Leaf Holdings (GLH.C) announced long tormented CEO Don Robinson would be moving on to new things.
It was long past time. As a consultant to the company, I’ve not been averse to saying publicly that Robinson has long been his own worst enemy, and I’ve written about the fact several times.
He’s also had more than a few issues to work through that weren’t of his doing. Regulators screwing up regulations. Voters voting weed businesses out of town. Partner companies that couldn’t keep their pesticides straight. And a share price that couldn’t find a way up if it had a rocket strapped to its ass.
I agreed to help the company out for six months – that was two years ago. That I still count them as a client was down to three things; 1) Long term investors at the company had united to ask me to stay around, 2) I’d been bullish on the company early and some readers (and myself) had lost money on the deal, which never sits right, and 3) Don Robinson told me ‘we’re through the worst of it, it’s all blue skies ahead.’
I don’t normally do charity work, but I did a lot with GLH – or at least I tried to. The truth is, I’ve been playing calendar tag with Don’s assistant, trying to arrange an interview for – literally – months.
Here’s an example of that:
Robinson’s assistant, March 22: Would it work with your schedule to take you up on your offer to do a podcast with Don the week of April 3?
Me, March 22: Certainly.
Robinson’s assistant, April 12: Now that we’ve shared our evolving story with the public was circling back to see if you were still interested in doing a podcast with Don?
Me, April 12: Definitely. When do you have a slot?
.. no answer.
Robinson’s assistant, May 4: Something came up for us and we were not able to schedule the podcast for Wednesday. Would you have time available tomorrow or Monday?
Me, May 5: Monday would work, whenever Don is free.
.. no answer.
Robinson’s assistant, May 30: Sorry for the delay in rescheduling this. Would you have time this week to tape a podcast with Don? Please provide some timeslots
Me, May 30: Could maybe do 2pm Thursday or Wednesday. Friday if those don‘t work.
.. no answer.
It’s been five months trying to get this client to talk to me on the record. FIVE MONTHS.
Now, if I were some rando journalist snooping around asking tricky questions, I get dodging. But I’m a friendly. I’m here to help get the story clear in the eyes of potential investors. My attention has been paid for, you’ve just got to dial the number and talk.
But the only time Don ever, in two years, dialed my number was when large investors at the company insisted he do so at the threat of being terminated. Cheques were late, sometimes months late. Stock certificates wouldn’t come without threats of loud public annoyance.
Let me be clear: I like Don, on a personal level. I met him early on in the process and he sold himself well as a big picture guy fitting a scrappy startup with fast growing revenues into much needed big boy pants. He’d run Mars Canada. If only as a logistics guy, he promised to torque GLH in ways they could use at the time.
But what nobody saw coming was that someone who’s run Mars Canada will often throw money at a problem. Need a delivery truck? Buy three. Need sales? Set up a dozen sales guys, and middle management to keep an eye on them, and offices to hold them all, and options for them to encourage them to stick around.
Robinson spent money like a trailer park lottery winner – hard, fast, and before it was in his hands.
In addition, Robinson didn’t get the markets. He didn’t understand why people would sell their $0.50 stock to buy the $0.45 debentures being offered, or why the compounding number of shares outstanding might be unattractive to a potential investor. He didn’t know why he had to bother with small investors – or large ones – and did so only begrudgingly.
Added to that, he couldn’t see the problems he was causing. I advised him a year ago that the share price would take a jump if he stepped sideways, a situation that would have benefited him financially, being as he’d bought heavily into several financings, for as much as $1.
He acknowledge this, admitted that he had become baggage for the company, but reaffirmed that he was through the worst and was now coming around the corner.
He never was. GLH tried hard – really hard – to move up but was always met with a wall of paper, churning outwards whenever the stock crossed positive thresholds. Those long term investors did right by the company; they bought into new financings are inflated prices, to show they were there for the long haul. Some, wanting Robinson to step, poured more money in and agreed to give him another chance regardless.
Why? Because a few years back, we all saw the initial presentation of the company, where they just extracted cannabis oil, processed it into top notch branded products, and sold those products across Oregon, with revenues climbing by 50% a month, until they hit maximum capacity.
Back then, the only bottleneck for the company was how many extraction machines they could get their hands on.
But soon it became hard to find out how many machines they owned, had ordered, and were operating. Claims they were developing the mother of all extraction machines were quietly forgotten. Statements that they had filled their machine suppliers order queue, to the detriment of every other competitor, ended with the company not doing any extracting as Oregon’s legislators bumbled the industry around like Saltspring Island fire twirlers being put in charge of a Wall Street bank.
Regardless, I kept doing my part, because I wanted GLH to work. I’d considered it a lay-up for a long time, and when it became clear that it wasn’t, a cavalcade of good markets people stepped forward to try to help. Frankly, I’ve not seen a single company benefit from so much commitment from people who normally have no time for a charitable corporate cause. Brokers, financiers, investors, partners, media – I’d see them arrive, then leave, frustrated.
I wasn’t paid for 3/4 of the time I gave to Golden Leaf, and I’m okay with that, because after a while I couldn’t do heavy lifting for it anymore. I could report on news, which I’d do with any company, client or not, but I couldn’t tell folks that they should get in – even as I was holding my own bag – because one guy in the middle of the maelstrom was spinning plates and not spitting cannabis oil cartridges.
I’m surprised it took this long to walk Don Robinson out of GLH. I thought it had happened several times, but he hung on, maybe because he held so much paper and jetting him out would have seen him sell it all. Maybe because the guy was genuinely good at telling you the things you hoped he’d be thinking.
The last few months saw GLH drop it’s head and swing mightily at a new business plan, acquiring weedcos across the US with the financing to come from more paper churn. It was a hail mary, to be sure, but a hail mary was needed.
I don’t know what caused Robinson to finally step aside. The news release says he’s engaging in other opportunities. That could be code for “we fired his ass” or it could be straight. Dude’s connected. His time with GLH was tortured, but that happens to the best people sometimes.
Weed analyst Alan Brochstein says he doesn’t see opportunity at GLH until the stock hits low-$0.20’s. Frankly, maybe that’s necessary. Maybe it needs a full panic sale to get all the old paper out so the stock can actually trade at it’s natural level, rather than at the glass ceiling in place from several financings prior.
I still hold some, a situation that’s less about promise and more about my wanting it to be clear that the downward slide wasn’t part of some nefarious pump. I, and others with a lot more invested, sit with big red percentage numbers on our portfolio next to the GLH ticker.
So what are we all going to do next?
I haven’t talked to the new guy in charge yet, but I hope to, partly because I want to know what transpired, but mostly because these things don’t happen without a plan. If the stock hits $0.20, I’ll buy more, like a beaten wife believing claims that ‘this time when he says he loves me, he means it.’
What I do pledge is that I’ll continue to operate as if I’m under contract to Golden Leaf for the foreseeable. If it has a grand plan, I’ll happily share it. If the new CEO wants to talk, I’ll talk often and long. If those old shareholders are still there, I’ll listen to their thoughts.
There’s a good company in there somewhere. It’s just been dressed in a sweat-stained ‘Shitty Company’ Halloween costume for the last two years. Time for change. New day.
— Chris Parry
FULL DISCLOSURE: I think GLH is still an Equity.guru marketing client. I still have stock. I’m still a bit jetlagged. This may all have just been a long fever dream.