Business ProfileforGranny Moss Products Corp

Gov. Action
November 10, 2020 The following describes a Desist and Refrain Order that has been formally brought by a government agency. The California Business, Consumer Services and Housing Agency Department of Financial Protection and Innovation alleges and charges as follows:

Granny Moss and Wainer (collectively, the Respondents), using at least one salesperson, solicited investments from investors in multiple states, including but not limited to California, Alabama, New York, Maryland, Georgia, and Colorado. The Respondents issued a Private Placement Memorandum (Granny Moss PPM), dated December 20, 2018, that stated, among other things, the following:

a. Through the Granny Moss PPM, the Respondents "are offering investors who have a pre-existing relationship with the Company and its management, and are familiar with the Company and its operations and business plan, a maximum of 2,500,000 shares (the 'Shares') of our common stock . . . We will not utilize placement agents or finders in relation to this offering . . . ."

b. Granny Moss Products Corp., is a cannabis extraction company that plans to "sell our brand name vape oil products under the name 'GrannyMossTM' through legally-licensed cannabis dispensaries in California . . . ."

c. The net proceeds of the offering "will be used for (i) general corporate purposes including legal and accounting services, (ii) expenses associated with a 'going public' transaction, (iii) advertising and marketing, (iv) general operating expenses, (iv) and (iii) (sic) miscellaneous fees and expenses, as described herein . . . Estimated Use of Proceeds . . . the proceeds will be applied with the following priority . . . Offering Expenses . . . Operations . . . General Corporate Purposes . . . Legal and Professional Fees . . . ."

d. The Respondents "believe the extraction technology we plan to use will give us a significant advantage over our competitors, and our patent should prevent others from being able to replicate the services we offer . . . ."

e. Granny Moss "may accept purchases of Shares only from investors who contacted the Company directly without the assistance of an investment advisor selling agent . . . ."

In or around December 2018, the Respondents, using a sales agent, offered and sold to a California resident 50,000 shares of common stock of Granny Moss for $2,500.00. On or around February 12, 2019, the Respondents offered and sold to the same California resident an additional 50,000 shares of common stock of Granny Moss for $2,500.00.

In or around January 2019, the Respondents, using a sales agent, contacted an Alabama resident and offered shares of common stock of Granny Moss. Neither the Respondents nor the sales agent had any pre-existing personal or business relationship with the Alabama resident. On or around January 22, 2019, the Respondents sold 50,000 shares of Granny Moss common stock to the Alabama resident for $2,500.00. On or around January 30, 2019, the Alabama resident and Wainer, as President on behalf of Granny Moss, executed a Subscription Agreement for the sale of the 50,000 shares of common stock.

The shares of Granny Moss common stock offered and sold by the Respondents were securities and were neither qualified nor exempt from the qualification requirement under the CSL. Further, the Respondents offered and sold securities in the State of California by means of written or oral communications that included an untrue statement of a material fact or omitted to state a material fact necessary to make the statements made, in light of the circumstances under which the statements were made, not misleading, including, but not limited to the following:

a. The Granny Moss PPM stated that Granny Moss was offering investors who had a pre-existing relationship with the company and its management, when in fact Granny Moss, through its sales agent, offered and sold shares of Granny Moss common stock to at least one Alabama resident with no pre-existing relationship with Granny Moss or its management;
b. The Granny Moss PPM stated that it would not utilize placement agents or finders in relation to the offering, when in fact it utilized and compensated at least one sales agent, to offer and sell shares of common stock in Granny Moss to at least two investors;
c. The Granny Moss PPM, which was dated December 20, 2018, stated that it planned to sell brand name vape oil products under the name 'GrannyMossTM' through legallylicensed cannabis dispensaries in California, but omitted to state that on November 1, 2018, it had only filed a Trademark application that was later abandoned on or around February 13, 2020, and never approved;
d. The Granny Moss PPM stated that the net proceeds of the offering would be used in the following order of priority: offering expenses, operations, general corporate purposes, and legal and professional fees, but omitted to state that the net proceeds were placed in a bank account controlled by Wainer and spent on personal living expenses, payments to at least one sales agent, frequent cash withdrawals, and rental payments for an unrelated company owned by Wainer;
e. The Granny Moss PPM stated that the extraction technology it planned to use will give it a significant advantage over its competitors, and its "patent should prevent others from being able to replicate the services" it offers, when in fact Granny Moss never had any patent;
f. The Granny Moss PPM stated that it "may accept purchases of Shares only from investors who contacted the Company directly without the assistance of an investment advisor selling agent," when in fact in or around January 2019, the Respondents, through a sales agent, offered and sold 50,000 shares of Granny Moss common stock by cold calling at least one Alabama resident who had no pre-existing business or personal relationship with the Respondents.
Based on the foregoing, the Commissioner is of the opinion that the securities offered and sold by Granny Moss Products Corp. and Laurence Wainer were securities subject to qualification under the CSL and such offers have not been qualified or exempted, in violation of Corporations Code section 25110.

Pursuant to Corporations Code section 25532, Granny Moss Products Corp. and Laurence Wainer, and their managers, officers, directors, agents, or employees, are hereby ordered to desist and refrain from the further offer or sale in the State of California of securities, including, but not limited to, shares of Granny Moss common stock, unless and until qualification has been made or unless exempt.

Further, based on the foregoing, the Commissioner is of the opinion that the securities offered and sold, or caused to be offered or sold, by Granny Moss Products Corp. and Laurence Wainer were offered and sold, or caused to be offered or sold, in this state by means of written or oral communications that included untrue statements of material fact or omitted to state material facts necessary in order to make the statements made, not misleading, in violation of Corporations Code section 25401

Pursuant to Corporations Code section 25532, Granny Moss Products Corp. and Laurence Wainer, and their managers, officers, directors, agents, or employees, are hereby ordered to desist and refrain from offering or selling any security in the State of California by means of any written or oral communication which includes an untrue statement of a material fact or omits to state a material fact necessary in order to make the statements made, in the light of the circumstances under which they were made, not misleading.


To access the full California Business, Consumer Services and Housing Agency Department of Financial Protection and Innovation press release, please visit: https://dfpi.ca.gov/wp-content/uploads/sites/337/2020/11/D-R-Granny-Moss-Products-Corp.pdf