OTTAWA -- A Conservative MP is asking Justice Minister Jody Wilson-Raybould to investigate whether a sudden surge in marijuana company stock trading two weeks ago was due to leaked information.
The government is expected to receive a report Wednesday on how to create a legal marijuana system, including recommendations on where it could be sold and how to regulate its sale. The report, written by a task force led by former justice minister Anne McLellan, is expected to cover the necessary laws and regulations.
The surge in trading happened on a single day, Nov. 16, two weeks prior to the report's release.
"If this [Nov. 16] surge was driven by someone with knowledge of what the task force will be recommending it would be highly concerning," Conservative MP Alex Nuttall wrote in a letter to Wilson-Raybould, to whom the task force reports.
"I would request that you take every step possible to ensure that there has been no premature release of the taskforce reports or its contents. It is important that you move quickly to fully examine these circumstances and whether anyone who had access to the report allowed the information to be released."
A spokeswoman for Wilson-Raybould said her office is preparing a response to Nuttall’s letter.
"The ministers will receive the report from the Task Force at the same time it is made public," Valerie Gervais said in an email.
The Nov. 16 trading was so wild it triggered brief halts to trading for six companies. The Investment Industry Regulatory Organization of Canada issues temporary suspensions in trading, known as circuit breakers, if a stock's price increases or decreases by 10 per cent within five minutes.
Canopy Growth Corporation, based in Smiths Falls, Ont., had its trading halted five times. Aphria Inc. had its trading stopped four times, and Aurora Cannabis had its trading halted three times.
Value doubled
Shares in Canopy Growth Corporation saw its value hit $17.86, double its level from a week earlier, before falling again. The total value of the company's stocks briefly hit $2 billion, twice what it was a few days before.
Stock in Aurora Cannabis, based in Alberta, jumped to $3.95, up from around $2 a week earlier.
Mettrum Health Corp. also saw its trading stopped twice, while Supreme Pharmaceuticals Inc. and OrganiGram Holdings Inc. had their trading stopped once each.
"Obviously we saw explosive growth of marijuana stocks on the TSX two weeks ago," Nuttall said in an interview with CTV News.
"And what we want to ensure is that no inside information was used to influence this change on the TSX."
Keith Richards, a portfolio manager with Value Trend Wealth Management, said trading in marijuana companies has picked up over the last year since the Liberals were elected. Canopy Growth Corporation saw a huge increase ahead of Nov. 16, up to 24 million shares traded that day.
"That's like four to five times its volume over the previous month. So that's unusual," Richards said.
Generally, Richards said, the only thing that would move a stock to double its price in one day is a material event like a merger.
"I couldn't find any news on the stock for that day. Why did it move? ... Nothing special seemed to be going on. So it is highly unusual," he said.
Blair fundraiser adds ‘larger cloud’
With the federal government studying how best to legalize weed, the companies already licensed to sell medical marijuana want the government to extend their selling privileges so they can tap into the potentially lucrative recreational market. They argue it would be the fastest, safest way to provide access to recreational users.
But they aren't the only ones who want to influence the government's coming legislation. Dispensary owners and small cannabis growers are also making their views known, including by attending a Liberal Party fundraiser with Bill Blair, Wilson-Raybould's parliamentary secretary and the government's lead on the marijuana file.
The Globe and Mail reported Tuesday that two lobbyists from the Cannabis Friendly Business Association attended an April 28 fundraiser for Liberal MP Nathaniel Erskine-Smith, at which Blair was featured. The fundraiser was held at Erskine-Smith's former law firm, Aird and Berlis, which represents or has represented three cannabis-business clients, the Globe said.
"That's certainly put an even larger cloud on this entire story," Nuttall said of the fundraiser.
Blair told the newspaper he spoke on behalf of Erskine-Smith and that he wasn't there to discuss marijuana. The Liberal Party said it was refunding the ticket cost to the lobbyists but that it hadn't done anything wrong.
With files from CTV’s Glen McGregor in Ottawa
An earlier version of this story said Canopy Growth Corporation did not return interview requests. In fact, the company had left a message that wasn't received when the story was posted. Canopy then refused to comment.
