Maltese investors in a cannabis-growing investment platform have been left in the lurch and out of pocket after the company stopped operating without warning. 

People who bought into the scheme - a platform called Juicy Fields - told Times of Malta that dividends stopped being paid out last week, the company’s social media accounts went dark and they were unable to withdraw their funds from the platform. 

Additionally, Daniel Gauci, a Maltese cannabis entrepreneur who held a position within the Valencia-based company, announced that he had left.

Juicy Fields claimed to allow small-scale investors to connect with cannabis farmers to fund the cultivation of medical marijuana, promising a large return on their initial investment. 

"Our platform helps you grow legal medical cannabis without having to apply for expensive cannabis licenses or to spend hundreds of thousands of dollars at a time," the company advertised on its website. 

MaltaToday reported on Sunday how some retail investors had lost over €100,000 and were completely blindsided when issues flagged with the company’s support team returned saying that the email address no longer existed. 

Deutsche Welle reported that the scheme likely affected a large number of micro-investors globally and that there were indications that the scheme had transformed into an exit scam, with the company being shut down after absorbing users' funds.  

The company said that it had garnered some 500,000 users and allowed investors to deposit up to €180,000. The money could be deposited and withdrawn via bank transfer or cryptocurrencies such as Bitcoin.

One investor who spoke to Times of Malta said that while he had only lost “a few thousand euros”, he was deeply concerned about the company’s behaviour and the fact that it now appeared that he had unwittingly subscribed to a Ponzi scheme. 

A Ponzi scheme is form of fraud that uses funds from new investors to pay out profits to existing ones, with new investors lured by the promise of a quick return on their investment. 

Such schemes fall apart as soon as the flood of new investors slows. 

“I had initially invested based on the recommendations of a friend and initially things were going well and it looked promising,” the local investor said. 

“While they were still paying out I didn’t give it that much thought.” 

Problems came to the fore in July, when the company stopped paying out profits, and the CEO left, along with a raft of other employees. 

“It was quite shocking and from the outside looking in looks like an elaborate Ponzi scheme," the investor said. 

A second person who spoke to Times of Malta described a similar timeline of events and said he believed some 40 Maltese people have been impacted by the scheme. 

"I got to know about Juicy Fields through acquaintances who had invested and had already got returns. Whilst the idea of potentially getting a 50% return on investments did seem appealing, I cannot say that it did not raise any suspicion, particularly since no due diligence exercise was carried out," he said.

"I decided to try it out by investing a mere €2,000, particularly because I had heard that Juicy Fields had applied for a licence with BaFIN [Germany's financial regulator].

"At first, newsletters were quite frequent and we kept getting the impression that the company was actually growing. One fine day we were informed by Juicy Fields that the company's staff had gone on strike."

Local cannabis entrepreneur distances himself from company

The Maltese connection to Juicy Fields went beyond its unwitting investors, with a local cannabis advocate among the company's previous employees. 

Daniel Gauci previously served as Chief Business Development Officer at Juicy Fields. 

In a statement posted to LinkedIn, Gauci said that he had no knowledge of the alleged Ponzi scheme and that he had been “manipulated and misled” by the company. 

Gauci said that the incident had left employees completely surprised as previously, decisions by the management had appeared to be “viable and profitable”. 

“I had chosen to leave due to the management problems and conflicts that had arisen along with some other personal issues and that, after trying very hard, I could not overcome,” he said. 

“I was giving promises and ‘facts’ on behalf of the company that were not being honoured, which was affecting me personally and having an effect on my working relationships both inside and outside the company.”

“I have been a cannabis activist for a long time and before I started at Juicy Fields, and I would like to continue, however, I feel that my credibility and reputation have now been destroyed through the actions of others.” 

Gauci claimed that he and his family have been receiving death threats and that while he maintains his and his team’s innocence, he would no longer be speaking publicly on the matter.