Response to Misleading Short Seller Report

Message from David Attard, CEO

David Attard, CEO, addresses the misleading short seller report targeted at PharmaCielo shareholders.

Letter to shareholders and response
to short seller report

MARCH 23, 2020

Dear Shareholders,

I want to update you on the conclusions of an independent review (the “Independent Review”) led by Douglas H. Bache, Audit Committee Chair, focused on the allegations contained in a New York based short seller’s report issued on March 2nd.

Based on the findings of the Independent Review, we are of the view that the bulk of the allegations set out in the short seller report are highly misleading or exaggerated to directly benefit the short seller at the expense of PharmaCielo Ltd.’s (“PharmaCielo” or the “Company”) shareholders.

The Independent Review determined with the benefit of a comprehensive legal and forensic accounting support, that the authors of the Hindenburg Research report (who by their own admission are short PharmaCielo stock) created a short sale thesis by construing a set of allegations based on faulty research and interpretation. The misleading report was actively promoted to investors and in the media as part of a “short and distort” campaign. The objective of such campaigns is not just to profit from a short position if the thesis proves correct, but to ensure the position pays off by spreading malicious rumours from “anonymous sources”, or worse (as in PharmaCielo’s case), presenting loosely aggregated bits of information as connected facts and presenting these “facts” in a negative light. While short selling is a counter trading strategy, campaigns such as the one waged against PharmaCielo are actively investigated by both the Securities and Exchange Commission in the U.S. and the Ontario Securities Commission, given their tendency to distort markets and cause unwarranted damage to shareholders.

To continue reading the full letter and response to the short seller report, click here to download the PDF.

Current production views

We fully expect 2020 will be a pivotal year for PharmaCielo as we continue our transition from building one of the most scalable cultivation, processing and extraction footprints in the global cannabis sector today to selling at commercial scale. Take a glimpse into our processing and extraction centre.

Press releases

PharmaCielo Independent Investigation Concludes Short Seller Report Contains Accusations and Claims Based on Faulty Interpretation of Events and Information – March 23rd, 2020

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PharmaCielo Issues Statement Regarding Misleading Short Seller Report – March 3rd, 2020

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Independent Review

On March 3, PharmaCielo’s board of directors appointed Doug Bache, Audit Committee Chair, as lead independent director to conduct an independent investigation, review and assessment of the allegations set out in the short seller report published by Hindenburg Research (the “Independent Review”). The Lead Director engaged legal teams from McMillan LLP, and forensic audit professionals from Grant Thornton LLP.

Douglas H. Bache Director, Audit Committee Chair View Bio (PDF)

Frequently Asked Questions

Although the short seller report is deliberately full of misleading information, false claims and sloppy analysis, we did not take its content lightly. As such, PharmaCielo established an independent investigation led by a lead independent director and advised by external experts from legal and accounting firms both in Canada and Colombia to fully investigate. In the process, they have not left a stone unturned. As much as we would have liked to instantly provide the full response that is now available on this website, this process of addressing each misstatement with the facts takes time. We owe this full, complete and transparent response to our shareholders and our business partners.

We are continuing to assess the value of the various legal remedies that are available for the Company to deploy.

While there is no silver bullet against unscrupulous practices, we strongly believe that our full response to each of the false allegations coupled with PharmaCielo’s strong corporate governance, transparency and integrity should deter future short sellers from trying to manipulate PharmaCielo’s stock price for their own financial gain. We also believe that our response is an important step to strengthen current and future shareholders’ confidence in PharmaCielo. These are the best lines of defence to hedge against this sort of short seller attack.

The short seller report has had absolutely no impact on our operations. PharmaCielo’s dedicated teams in Colombia and Canada continue to work as usual to execute according to the Company’s business strategy.

Shareholders with additional questions about PharmaCielo’s response to the short seller report are encouraged to contact the independent investigation led by a lead independent director or our investor relations team at