Sniffing out Wyatt’s “$0.50 Cannabis Pre-IPO” Pitch

What's this marijuana pre-IPO offer that comes with "free shares?"

By Travis Johnson, Stock Gumshoe, August 29, 2019

We’ve seen plenty of “get in before the IPO” pitches over the years, and that has only accelerated as more and more companies have taken advantage of the JOBS Act to raise money under easier rules — particularly the “democratization” of private funding to allow unaccredited investors to invest in small private companies.

Combining that with marijuana really gets the greed juices flowing, as Ian Wyatt is no doubt aware — he has run several promos for these “get in before the IPO” marijuana stock opportunities over the past year or so, and this one drove quite a few questions our way so I thought I’d look for some answers for you.

Here’s how the latest email got my attention:

“It’s no joke…

“Right now, you can claim ‘FREE bonus shares’ known as stock warrants.

“It’s 100% included with this $0.50 cannabis CBD Pre-IPO.

“Go here ASAP – before 12pm.

“So, how does this work?

“You become an early investor in this Pre-IPO – BUYING shares of stock for just $0.50 (versus the expected IPO price of $1.50).

“Plus, for every 1,000 shares of stock… you’ll get 500 of these stock warrants.”

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The ad is for one of those interminable “live seminars” that the newsletter pitchmen use so often now, presumably because once they’ve gotten you to listen to their spiel for half an hour you’ll be so emotionally invested in the idea that you’ll willingly sign up for whatever service they’re selling to get that “final secret.”

I’m writing this before Wyatt’s “live event” at Noon on Thursday, but I imagine it will be like all his past events that I’ve listened to — a long presentation about how lucrative this investment could be, followed by a pitch to sign up for a newsletter in order to get the details of the actual investment. I don’t know which service he’ll be selling, he’s got a dozen or so different services he publishes, but newsletters who tout “private placement” investments like this tend to be of the more expensive variety.

[ed. note: now that the “live event” has happened, we can confirm that this is an ad for Ian Wyatt’s Capitalist Ventures, a private-placement service that aims to ID pre-public companies who are raising money, sub. price $1,997/year]

What clues do we get about the company that’s offering these “pre-IPO shares?” Here’s a bit more from the ad:

“One California cannabis insider is launching a NEW company with a bold mission…

“TO BECOME CALIFORNIA’S #1 MARIJUANA COMPANY”

California is arguably the most “established” marijuana market in the US, so that’s a tall order. What else?

“The S.E.C. just approved this Regulation A securities filing. And that means EVERY investor – whether you have $2,000 or $2 million – can buy Pre-IPO shares.

“The price? Just $0.50….

“Now, the deal was approved last week.

“The CEO tells me that 4,200 regular Americans have already requested shares. And the Pre-IPO is now 93% full.”

And one version of the ad included a “redacted” photo of the SEC filing — what Wyatt calls the “official ‘stamp of approval'” — so, yes, your friendly neighborhood Thinkolator can indeed let you in o the secret… this is a company called Juva Life, which fancies itself an emerging “cannabis conglomerate” and is, indeed, doing a Reg A stock offering right now.

This is very much a “back the management team” venture — they have some planned properties, but no actual business yet from what I can tell, and no assets. You can see their SEC filing here, which includes similar information to what would be filed for a IPO… and I’d suggest reading the risk factors carefully, if only to help you “cool your jets” as you imagine the riches headed your way.

And yes, like many private placements this one includes warrants as a little “thank you gift” for taking the risk of backing them and participating in the fundraising — the offering is of “units”, each of which will be priced at 50 cents, and every unit consists of a common share and half of a warrant. Warrants are somewhat like call options, each full warrant gives you the right to buy another common share for 75 cents for the next 18 months (so if the value of the common stock rises by at least 50% over the next year and a half, the warrants will provide some additional leveraged return for you… if the stock does not rise above 75 cents, the warrants will end up being worthless in a year and a half).

(Do note, if you’re not an experienced warrant investor, that warrants, unlike call options, can expire and disappear from your portfolio with no compensation even if they are “in the money” — they are not passive, your broker will probably not automatically exercise them for you if they see the expiration coming, you have to take some action before expiration to either sell or exercise the warrant. Assuming, that is, that the company ever gets a public listing and the warrants become tradeable — if they remain private warrants and don’t trade on the exchange, you’ll have to deal with the company directly to exercise them).

So is this an attractive offering for you? Their intention is to list the company on the Canadian Securities Exchange (CSE, sometimes abbreviated CX), but I don’t know what the timing will be and there is no guarantee that they’ll be successful in that… and if you can’t trade on the CSE, it might not be easy for you to sell your shares or warrants in the future, so you definitely shouldn’t consider investing if this is a commitment you might want to back out of in a few weeks or months (and, of course, the company has no real operations yet, so there is a very real possibility that you will lose most of your money).

Wyatt says that they have gotten interest for most of the shares, and the company claims to have gotten “overwhelming interest” in the fundraising, but the offering hasn’t technically opened yet so I assume no one has actually put any money in — it says on their site that the Reg A+ offer will open on September 3, so they’re accepting expressions of interest now and will presumably start the selling next week.

The investor presentation and website look quite impressive, even beyond the CEO’s awesome hair, but they are also filled with “will” language — they “will produce” high quality cannabis, they “will” have a network of dispensaries and delivery operations… to my view this is not really investing in a company, this is backing a company before it really exists.

That’s not that unusual, of course, startups often can’t get far without raising capital, but the (sometimes) long timeframe of starting up operations and permitting and construction and the heavy investments to be made, perhaps for many years, before they build a business and a brand and generate meaningful revenue are not necessarily something that “regular” investors like you and I are conditioned to expect… and they also mean you’re putting a lot of trust in the management team to establish an economically viable business with your money.

When looking into private placements in untraded companies, you’ll usually be given plenty of reason to get the greed sensors jumping — you don’t need help daydreaming about future wealth, so it’s typically more important to think about how much is at risk, and what the possibilities are for exiting your investment. That includes the usual concerns you’d have about any microcap company in a volatile business, like the worry about the stock falling in value by 90% because the business just isn’t as good as the promotional material indicated, but since you can’t sell tomorrow you need to think about those risks that are specific to private placements… Are the shares locked up for a period of time? When will they list? Will the warrants be listed and tradeable? What if that doesn’t happen on the schedule they expect?

On the flip side, the shares won’t be volatile — because they won’t be traded, and you won’t see the value of your investment fluctuating every day, so you won’t have to worry about whether to buy or sell with each 20% bump up or down. Until it gets a listing and your shares are registered for trading at some uncertain point in the future, this is effectively a “buy and hold” speculation.

So no, this is not particularly attractive to me… but if you are feeling like taking on startup risk and have reason to believe that Juva will establish a powerful brand, or has the potential to establish some other kind of advantage in a very crowded marketplace, then perhaps you’ll be tempted to take the risk — just think it over, and actually read and understand those filings (really!) before you commit to anything. And, as always, do let us know what you think with a comment below.



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elk82070
Member
👍81
elk82070

Palm Beach’s T. Tiwari has been pitching a “pre-IPO” pot stock that was something like $0.50 and also included some warrants. Big push for the last two months. I wonder if this is the same company.

texasranger
Member
👍36
texasranger

It is the same company

elk82070
Member
👍81
elk82070

Thank you.

Darden
Guest
Darden

Yes this is the same. T. Tiwari was pushing JUVA. They are about to send out their investor paperwork to purchase their stock. Tiwari’s offer must not have gotten the whole deal sold.

anndeavila
Member
👍40
anndeavila

OMG I just spent 1 1/2 hours on a webinar only to find it was just a pitch to join a $1997 subscription to Capitalist Ventures to learn the name of the pre IPO. I already have a 2 year subscription which I paid $69.00 for. I lost money on his first stock recommendation and thought that the webinar was part of this original subscription. I have asked for a refund of the $69.00 and will never, ever fall for this guy again. Buyers beware of Ian Wyatt. Talk about a waste of time. Deceptive and very disappointing.

George C.
Guest

I couldn’t agree more. Wyatt needs to be held accountable for his seemingly deceptive practices.

fashiongirl4319
Member
👍2
fashiongirl4319

I was waiting for Travis to scope this for I have been doing some scoping on my own of the hints Ian has been putting out there in the emails. This is actually not the first seminar he had for this pre-IPO for he had another one in early August I believe that I attended. Of course it’s the same thing in his videos pushing a sale, I don’t buy it, I do my own research. I came across a company that is similar to what he was saying based on the tips he was giving. I forgot the company… Read more »

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George C.
Guest

You’re getting it fashiongirl and I applaud you for making this post. These guys have to be exposed for their down-right deceptive practices to do nothing more than trying to pick the pockets of unsuspecting investors. Keep up the fight to expose these people. In the end, we will prevail.

Michael.Bahr
Guest

I did a search for Juva Life looks like Motley Fool might have this stock on its radar. I am going to do more research before making a decision to make a small investment like I did with XY ThePersistent Company. Travis what do you think about XY if they are using Broadridge Corp. Issuer Solutions Inc. are they getting ready to be listed on some stock exchange?

Jeff Olsen
Guest
Jeff Olsen

I too am a fan of XY. Looks like a great little company.

phir
Member
👍4
phir

Wonderful explanation and to the point. I don’t know how many ‘promotions’ I’ve listened to under, as you said, 12 different newsletters or as bad, one of a half-dozen different ‘managers’ promoting their latest whatever. I’m sick and tired of seeing the same ‘whatever’ promotion that I’ve seen 15 times (under different guises), that I said no to (and meant it) the first time. I’ve come so close to canceling my subscription(s) because of that crap. I get so numb to the ‘latest and greatest’ that I just start deleting, deleting. Please continue your direct down and dirty approach guidance… Read more »

George C.
Guest

Travis, please continue to expose these deceptive practioners for the benefit of us all.

budder694
Member
👍14

I am new to this game. Made the mistake of believing these shysters. Finally figured out they only get you to subscribe to their newsletters so they can inundate you with the chain of other newsletter hype. I have cancelled all of my subscriptions except a pot stock newsletter which seems to be OK. But I look up all stock recommended and get updates from TD Ameritrade if available, and company websites. I love this Gumshoe website! Sure saves me a lot of time and aggravation. Keep up the great work!

drkrchrdsn
Member
👍-2
drkrchrdsn

You stated that you canceled all of your subscriptions, minus one. Did they refund your Monies? I am also “new” to the game, and ready to cancel my subscriptions as well, I am ashamed to admit the amount I have spent with them, I doubt that they will refund me anything, and only offer me credit towards their other offerings.

microcapwiz
Member
👍16
microcapwiz

you want help – dont put a nickel in juva life – there are only a few names in the space that are investible which are Green Thumb, Cresco Labs, Curaleaf, PLus Products and Jushi Holdings, COlumbia Care is on the bublle. THATS IT –

Jan Sinscalchi
Guest
Jan Sinscalchi

Thanks for the analysis. ALWAYS love to read your thoughts on these claims of fortune in a haystack!!

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talktome
Irregular
👍149

Teeka was touting the same thing….I agree Travis, I would not touch it with a ten foot pole…you would be better off buying some shares of emerald therapeutics on the cheap…even with their problems it’s a better bet…Warren Buffet says IPO’s are a silly game….I would agree

Jehnean
Guest
Jehnean

What is the ticker symbol of emerald therapeutics? I would like to look them up and research. Thanks for your post.

Kitty Tripp
Guest
Kitty Tripp

Man, Wyatt is a huckster. I listened to some of his spiels and did my own legwork to figure out what he was pushing so hard last year ( Sproutly and Choom) and put a few hundred in each. I am still so in the red its a bit nauseating. I felt like I just bought some of his bags. At least I worked it out on my own instead of paying him to tell me… I would never get involved with him.

George C.
Guest

You’re spot on, Kitty, and I sincerely hope that all of us spread the word so that he is buried and stops deceptively getting the uninitiated and naive to parting with their hard-earned bucks to receive nothing but more vacuous representations of unrealistic wealth and further promotions.

Phil
Guest
Phil

I’ll pass .

brotherjim3
Member
👍41

Pardon me for saying it, but I wonder if some of these guys are enjoying their own product too much.

fab333
Guest
fab333

thats a good one lol.

Danny
Guest
Danny

Very informative as always. I was wondering. Way to early in their game to get in. Too many team’s already on the ballfield. The rollercoaster ride of pot stocks hasn’t stopped yet and still probably has another year of ups, downs, and buyouts. I’d feel safer with gold and silver right now looking at the failing economic’s on the international scene. Our petro dollar has been dying for sometime and the fake life support will soon fail itself. All the signs are pointing to another big bubble pop and all the rest will fall like dominoes. A lot of wealth… Read more »

Judith Gebora
Guest
Judith Gebora

Thank you Travis these information! You did save me a lot of money and headache!

backoffice
Guest
backoffice

Travis has saved me a bundle from these vultures.

George C.
Guest

Amen!

RENE IBANEZ
Guest
RENE IBANEZ

I am grateful and thankful for your analysis. I just became interested in the stock market and have learned a great deal reading your column and the comments of other investors. Thank the almighty for your column. Until one of your recent articles enlightened me I thought I was wasting a golden opportunity to invest in one of those “can’t miss ” companies in the 5G market with a must invest now message. Thank you for saving me from making a serious error.
R I

Jack
Guest
Jack

There’s no easy road to riches. If there was guys like Wyatt wouldn’t be offering overpriced newsletters and webinars to investors. Treat them all with a grain of salt and don’t give them your hard earned money. They are looking after their interests not ours.

George C.
Guest

Right on, Jack! Apparently, Wyatt and others like him depend on sucking in new subscribers for their income. That tells me their services do not meet with much satisfaction (i.e., in practice, they’re not really viable); so, the renewal rates are very low. He uses virtually the same verbiage, (family) photos, out-of-date charts, “questions” and other thread-bare props to tug at the hearts and minds of viewers to capture new subscribers. Stay far away and CAVEAT EMPTOR!

yelpik
Irregular
👍243
yelpik

Pot smoking California flakes, what could go wrong.

Worldlyview
Guest
Worldlyview

It is disheartening to me that so many readers/commenters of the Gumshoe spend time and money listening to the ‘get rich quick’ newsletters. We are relatively knowledgeable about the guesswork and exaggerations associated with these expensive offerings of pseudo magical pathways to riches. But we are the minority. There will always be a huge, never-ending cohort of those not reading Travis’s commentaries who will be suckered into paying big bucks for hype and hope. There is no repealing the Barnum-esque dictum that ‘There’s a sucker born every minute.’ This dictum also explains why robo callers stay in business despite a… Read more »

Normally Dubious
Member
👍129

But then there’s other webinars about new techniques to predict the market changes days in advance using AI and other mechanisms. The “hook pattern” is the biggest crock.

George C.
Guest

The best advice/reason for staying away from guys like these and their pitches to get you to subscribe to their over-priced newsletters was penned many, many years ago:
“O, what a tangled web we weave when first we practise to deceive!”
Sir Walter Scott (1772 – 1832)
Always pay very close attention to what Travis says.
CAVEAT EMPTOR!!