A $160 million cannabis products company is at the heart of...

A $160 million cannabis products company is at the heart of ASIC’s interest in Sydney stockbroker EverBlu Capital, and associated raids in Sydney and on the Gold Coast.

EverBlu executive chairman, Adam Blumenthal, doubles as non-executive chairman and co-founder at ASX-listed Creso Pharma, and is often seen as the market face for the stock.

ASX stopped trading in medicinal cannabis outfit Creso Pharma’s shares on Tuesday afternoon. Rohan Thomson

Creso Pharma was set up to develop, register and commercialise pharmaceutical-grade cannabis and hemp-based nutraceutical products and treatments in 2015, and listed on the ASX in 2016.

It is the sort of stock that bounces around at the smaller end of the market, at the whim of day-traders and at times online investing forums. It has closed everywhere from 8¢ a share to 15¢ in the past month.

Creso stock was sold off heavily on Tuesday afternoon, following Street Talk’s report that EverBlu had been raided. It was the logical target, given EverBlu’s close ties to the company.

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The ASX stopped Creso shares trading when it was down 9.6 per cent to 12¢ at 3.31pm, Sydney time, because of the quantum of the fall and volume of stock traded.

There were other raids in connection to the investigation, including on the Gold Coast. The exact nature of the investigation is not known, although ASIC is expected to be keeping an open mind to see what if any evidence turns up in the raids.

Creso has also been frantic issuer in terms of news - 75 announcements to the ASX in the past five months including everything from M&A deals, to customer contracts, distribution agreements, a potential NASDAQ listing and an options issue to raise capital - as it tries to crack the big time in North America and Europe.

Blumenthal’s been involved with Creso Pharma from day dot, and EverBlu has helped its corporate activities along the way. Most recently it was named as corporate adviser in a Creso options issue prospectus in October.

He’s also a substantial Creso Pharma investor, owning a 10.3 per cent stake and a bunch of listed options. He sold a large parcel of shares in early July.

A spokesperson for EverBlu Capital declined to comment on whether ASIC’s investigation related to Creso Pharma.

She earlier said: “EverBlu Capital confirms it is co-operating with the regulator regarding an external matter. It will continue assist the regulator as required.”