Canaccord Fumes Over Pot Deal

NEW YORK (TheStreet) -- Canaccord Genuity (CF.TO) is a broker dealer, but don't call them a toker dealer.

The Toronto-based wealth management and securities company helped aspiring pot grower Enertopia  (ENRT) raise $1,293,800 million in a private placement transaction, but, upon being informed by TheStreet that it had been credited in a press release accompanying a regulatory filing, Canaccord wasn't feeling the vibes.

"To confirm my voice-mail message to you, you have used the Canaccord Genuity name in the attached media release WITHOUT the approval of our Firm.

"Please WITHDRAW/RECALL this communication immediately and, if you reissue it, delete our name from any subsequent public communication. As a courtesy, please advise us when these steps have been implemented so that no further action on our part is necessary," read an email from James Beamish, a marketing executive in Canaccord's wealth management division, to Enertopia CEO and President Robert McAllister. (The capital letters are included here as they were the original email.)

Scott Davidson, Canaccord's Global Head of Corporate Development and Strategy, confirmed the email, and characterized the situation as a "misunderstanding."

"We have a process that we use," he said, "it's more of a procedural issue than anything else." He said Canaccord wasn't an underwriter for Enertopia and didn't act as its adviser. Rather than putting the firm's official stamp on the transaction as it would if were representing Entertopia, one of Canaccord's wealth managers reached out to one or more of his own clients with the opportunity to invest in the company, Davidson said. Those clients are considered accredited investors under Canadian securities laws because they meet certain minimum asset requirements, so the rules for selling securities to them aren't as strict as they are for most retail investors.

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