The shocking information that a well-known, international corporation with lofty promises for cannabis investors may be a Ponzi scheme has the cannabis industry reeling.
Furthermore, the local sector appears to be at risk of being tarnished by the collapse given that a key executive of Juicy Fields is based in Malta. In the wake of the controversy, in a recent LovinMalta interview, Damon Booth, the founder of Melabis, a cannabis services business, claims that this could heavily impact the island just months after it legalised personal cannabis use.
‘Juicy Fields were extremely vocal and out there, especially at conferences that me or my colleagues had attended’, Booth claims in the interview. ‘They did seem to be everywhere – but what’s frustrating is, I don’t think they necessarily did have a strong presence in Malta.’
Damon has seen companies come and go, especially with his strong presence in the industry. However, he also noticed how Juicy Fields quickly rose to the top without necessarily being Malta-focused.
‘I feel that Malta is going to get unfair backlash as a couple of their staff were based here and they sponsored a couple of events on the island,’ he says. ‘In comparison, they were heavily promoted at much bigger events in Spain and Germany. I believe they sponsored dozens of events globally. Even the staff that was based in Malta from my understanding were paid employees and not shareholders or owners so (I hope) did not benefit from what looks like an exit scam. Unfortunately, Malta will receive more negative press with the ground the country has made on legalising cannabis in general.’
Booth himself did not invest in Juicy Fields but a number of e-growers, all over the world, invested hundreds of thousands of euros into growing cannabis.
‘Losing any amount here would be upsetting. I had checked their deck out and the numbers just didn’t quite make sense to me, the number of plants they claimed to grow per square meter, for example, didn’t stack up. It was nothing glaringly obvious, though I did think it may be a Ponzi-style scheme. Any company that seemingly spends so much on marketing that is relying on deposits from investors is a little red flag for me’, claims Booth.
However, no one would have imagined that Juicy Fields would go to the lengths that it did, even Booth who saw the company to be somewhat suspicious from the start.
‘I would have called them out vocally if I had an idea they were running a scam of any scale, let alone this magnitude. These types of situations have a negative effect on a whole industry that is trying to run legitimate projects and it leaves a very sour taste in everyone’s mouths sadly. I’ve been contacted by a few people asking if Melabis had any involvement with Juicy Fields which we absolutely did not, nor even any contact with them, but that negative outlook can tar all companies with the same brush. We actually set a concurrent project up which we intended to launch this year that utilises our own crops and license at Melabis to allow customers to grow their own cannabis, says Booth.
He hopes that this project will not be jeopardised by Juicy Fields and this scandal. However, Booth remains confident that the growing local and international cannabis industry will come out strong. He urges potential investors not to be put off by this case.
‘Use this as a lesson to really do your own due diligence. Check the numbers out with third parties. Confirm any claims, such as partnerships with other companies. Juicy Fields’ claimed they had partnered up with many listed cannabis companies, this could have been verified, or not. Ultimately, in any investment, never invest more than you are willing to lose,” he says.
What do you think about the Juicy Fields case? Were you affected by it? Do you think this will tarnish the reputation of Malta’s cannabis industry? We would love to hear your thoughts!