Creative Edge Nutrition Inc (OTCMKTS:FITX) is moving lower in recent trading after the recent pop up. The stock continues to be one of the top most traded stocks on the entire OTCBB and boasts a very loyal following of investors.
FITX announced on November 19 their intention to Spin Off Canadian Wholly-Owned Subsidiary, CEN Biotech Inc. as well as the resignation of the entire board of directors and officers in the Company.
The news which completely changes the course of FITX moving forward lacks much important information and clarification and has left shareholders confused. It does state that current shareholders will both keep their shares of FITX and receive additional shares of the newly formed publicly traded company. The share distribution will be on a “pro rata basis” based on the number of FITX shares owned; more on this later.
Creative Edge Nutrition Inc (OTCMKTS:FITX) is a Nutritional Supplement Company that entered the pot business at the end of last year when they leased a six acre site with buildings in the Town of Lakeshore, Ontario, Canada.
At the time the Company established a partially owned subsidiary CEN Biotech, Inc. with the sole purpose of obtaining a licensure to build Medicinal Marijuana facilities adhering to all local legal requirements.
The plan was to build a 58,000 sq. ft. building to grow pot and make the property the largest, most advanced medical marijuana grow facility on earth. CEO Bill Chaaban said they plan to “‘Eventually expand that facility to more than 1 million square feet on multiple floors and within five years grow 1.3 million pounds of pot annually. That would translate to $5 billion a year’ in revenue”
Back in November 2013 FITX announced ”it has broken ground to start the build-out” This news was the initial catalyst that would drive FITX from illiquid in the subs to over a dime at its highs and easily the top most traded stock on the entire OTCBB. The problem has been from the beginning that the Town of Lakeshore wants nothing to do with FITX and has been dogging the Company on zoning since day one.
There has been incredible confusion on the issue much of it instigated by former CEO Bill Chaaban who continued to issue press suggesting the project was moving ahead full steam even as the Company lacked such basics as obtaining a license from MMPR (Medical Marihuana Purposes Regulations) and required municipal approval from the Town of Lakeshore.
On November 6 the Town of Lakeshore said on their website that ‘’the subject North Rear Road properties are zoned and designated Agricultural and the current structures are consistent with the designation and zone. However, the growing or processing of medical marihuana at these sites would not be permitted under their current zoning. An applicant would be required to apply for a Re-zoning of the site. They are not ‘grandfathered’ under the Council amendment.’’
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There seems to be some shareholders that are so vested in the idea that they want to continue to believe the Lakeshore project will happen touting minutes from a Lakeshore council meeting back in November of last year that says that FITX does have the correct zoning.
FITX announced on November 19 their intention to Spin Off Canadian Wholly-Owned Subsidiary, CEN Biotech Inc. as well as the resignation of the entire board of directors. They announced Mr. James Robinson, a noted entrepreneur in the dietary nutrition space as the new CEO and said they plan to focus on Nutrition.
Upon completion of the spin-off, all shareholders of Creative Edge Nutrition, Inc. will retain their shares in Creative Edge Nutrition while additionally getting shares in CEN Biotech Inc., which will be a new publicly-traded company. The distribution of CEN Biotech Inc. shares will be on a pro rata basis to the Creative Edge Nutrition shareholders based on the number of shares of Creative Edge Nutrition shares owned by each shareholder.
The ‘entire board of directors’ that resigned from the nutritional division are now the board of directors of CEN Biotech, the marijuana division.
FITX has built a massive following that includes 12,500 followers on Facebook, 1,500 followers on Investors hub and 4,700 followers on Seeking Alpha.
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Like no other pot stock FITX was the most successful in capturing the imaginations and pocketbooks of small cap investors. At its height the stock was almost like a cult with shareholders selling t-shirts that said “FITX-Long” or “I-Billieve” (as in president and CEO of FITX, Bahige “Bill” Chaaban).
Currently trading at a $65 million market valuation FITX has never traded on fundamentals and it’s certainly not about to start now. As new CEO James Robinson takes the helm, shareholders are left wondering what happened in Lakeshore, Ontario.
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Disclosure: we hold no position in FITX either long or short and we have not been compensated for this article.