{"id":7868,"date":"2017-11-21T00:03:01","date_gmt":"2017-11-21T00:03:01","guid":{"rendered":"http:\/\/www.denverpost.com?p=2864166&amp;preview_id=2864166"},"modified":"2017-11-21T00:03:01","modified_gmt":"2017-11-21T00:03:01","slug":"massroots-founder-initiates-proxy-battle-to-overthrow-denver-marijuana-firms-board-leadership","status":"publish","type":"post","link":"https:\/\/cannitrol.com\/blog\/massroots-founder-initiates-proxy-battle-to-overthrow-denver-marijuana-firms-board-leadership\/","title":{"rendered":"MassRoots founder initiates proxy battle to overthrow Denver marijuana firm\u2019s board, leadership"},"content":{"rendered":"<div id=\"wp_fb_like_button\" style=\"margin:5px 0 5px 5px;float:right;height:100px;\"><script src=\"http:\/\/connect.facebook.net\/en_US\/all.js#xfbml=1\"><\/script><fb:like href=\"https:\/\/cannitrol.com\/blog\/massroots-founder-initiates-proxy-battle-to-overthrow-denver-marijuana-firms-board-leadership\/\" send=\"true\" layout=\"standard\" width=\"450\" show_faces=\"false\" font=\"arial\" action=\"like\" colorscheme=\"light\"><\/fb:like><\/div><div class=\"media_block\"><\/div>\n<div class=\"row\">\n<div class=\"large-10 large-centered small-12 columns\">\n<div class=\"entry-meta-date\">Published: Nov 20, 2017, 3:31 pm \u2022 Updated: Nov 20, 2017, 5:18 pm<span class=\"single-comments-link\" \/><\/div>\n<p class=\"byline\">By <span class=\"author\"><a class=\"url fn n\" href=\"http:\/\/www.thecannabist.co\/author\/awallace\/\" rel=\"author\">Alicia Wallace<\/a><\/span><em>, The Cannabist Staff<\/em><\/p>\n<p>The embattled former CEO of MassRoots Inc. launched a counteroffensive against the firm that is <a href=\"http:\/\/www.thecannabist.co\/2017\/11\/20\/massroots-sues-isaac-dietrich\/92742\/\">now suing him<\/a>.<\/p>\n<p>MassRoots founder Isaac Dietrich, who remains the largest shareholder of the Denver-based marijuana social network and business technology company, on Monday initiated a process with the U.S. Securities and Exchange Commission requesting a special meeting and shareholder vote to elect a new board.<\/p>\n<p>\u201cI strongly believe that the board must be reconstituted to ensure that the interests of the shareholders are appropriately represented in the boardroom, and that the board takes the necessary steps to help the company\u2019s shareholders realize maximum value for their investment,\u201d Dietrich wrote in the SEC filing.<\/p>\n<hr \/>\n<p><strong>Related: <a href=\"http:\/\/www.thecannabist.co\/2017\/11\/20\/massroots-sues-isaac-dietrich\/92742\/\">MassRoots sues founder, former CEO, alleging \u201cserious misconduct\u201d<\/a><\/strong><\/p>\n<hr \/>\n<p>Dietrich, in an interview with The Cannabist, said he believes the company he founded in 2013 has potential to become a market leader in the cannabis industry \u2014 especially in what could be a colossal market in California. However, he doesn\u2019t believe MassRoots could succeed under the guidance of the current trio of directors and interim CEO.<\/p>\n<p>\u201cHistory has proven that when a founder is removed from a company, typically it loses its vision and its drive going forward,\u201d Dietrich said. \u201cI truly feel that if we make this change, we\u2019re going to be in a position to dominate California.\u201d<\/p>\n<p>In initiating the proxy fight, Dietrich is seeking to replace three board members: Terence Fitch, a former beverage industry executive who logged two decades at Coca-Cola; Vincent \u201cTripp\u201d Keber, the chief executive of cannabis infused products company Dixie Elixirs; and Ean Seeb, co-founder of consulting firm Denver Relief LLC.<\/p>\n<p>Keber and Seeb have held their seats since 2014. Fitch has served as a MassRoots director since 2015.<\/p>\n<p>When reached early Monday evening, Seeb said he could not directly address Dietrich\u2019s claims, noting that he yet to review the SEC documents filed in the afternoon.<\/p>\n<p>Speaking generally, Seeb reiterated his and his fellow board members\u2019 longevity as directors, adding that \u201cnobody (on the board) has ever sold a single share\u201d of MassRoots stock.<\/p>\n<p>Keber was immediately available for comment. A phone number could not be immediately located for Fitch. Interim CEO Scott Kveton and MassRoots\u2019 legal counsel could not be reached Monday for comment.<\/p>\n<p>Dietrich\u2019s suggested replacement board includes himself as well as Charles R. Blum, 79, a former CEO of Texas-based oil pipeline technology firm QS Energy and longtime head of the Specialty Equipment Market Association, a specialty automotive trade organization; Nathan Shelton, 68, a former president of auto equipment manufacturer K&amp;N Engineering and former board member of QS Energy and SEMA; and Cecil Kyte, 46, an executive at copyright protection firm Rightscorp.<\/p>\n<p>Those nominated have experience in growing small, public companies, Dietrich said, adding he was introduced to the three executives by one of MassRoots\u2019 larger investors.<\/p>\n<p>Dietrich, 25, owns nearly 17.74 million shares of MassRoots, or about 15.82 percent of the outstanding shares, according to Monday\u2019s SEC filing.<\/p>\n<p>The move is the latest chapter in MassRoots\u2019 recent saga, a corporate drama unfolding at a company once touted as the \u201c<a href=\"https:\/\/www.pbs.org\/newshour\/nation\/facebook-for-pot-files-to-be-first-cannabis-company-on-nasdaq\">Facebook for pot<\/a>.\u201d <\/p>\n<p>Last week, the company filed a lawsuit in Denver District Court <a href=\"http:\/\/www.thecannabist.co\/2017\/11\/20\/massroots-sues-isaac-dietrich\/92742\/\">alleging Dietrich had violated terms<\/a> of his separation agreement, less than a month after MassRoots officials announced that <a href=\"http:\/\/www.thecannabist.co\/2017\/10\/19\/massroots-cannaregs-acquisition-nixed-isaac-dietrich-scott-kveton-ceo-switch\/90371\/\">Dietrich resigned<\/a> as part of a \u201cplanned transition\u201d from executive to solely a member of the board, where his \u201cvisionary\u201d skills could be better utilized. Taking the helm was Kveton, founder of compliance software firm Odava, which MassRoots acquired months earlier.<\/p>\n<p>In the days after the Oct. 16 executive shift, Kveton was joined by Dietrich on a conference call with investors. The new CEO lauded his predecessor and the company\u2019s promise of being a leading provider of consumer- and business-focused technologies including a dispensary locator, social network, point-of-sale and ordering systems.<\/p>\n<p>Behind the scenes, however, the situation wasn\u2019t that amiable, according to Dietrich and other sources close to the company.<\/p>\n<p>Dietrich\u2019s allegations, as told to The Cannabist, include that he was \u201cextorted based upon false and misleading information into giving up the company\u201d that he founded. He also claims the directors ignored the will of the shareholders.<\/p>\n<p>Last month, in the days before his ouster, Dietrich said a majority of shareholders voted via a written consent process to remove the majority of the board.<\/p>\n<p>Dietrich believes the shareholders will have his back in this proxy fight.<\/p>\n<p>The early media reports following Dietrich\u2019s departure painted MassRoots as a company in turmoil, one that was bleeding cash and subject to stock promotion queries by the OTC Markets exchange.<\/p>\n<p>Dietrich said his fellow board members bristled at the $12 million valuation of the <a href=\"http:\/\/www.thecannabist.co\/2017\/08\/23\/massroots-buy-cannaregs\/86625\/\">30-million-share stock deal for Denver-based CannaRegs,<\/a> a compliance firm that offers database of cannabis policies and regulations. The infighting resulted in the scuttling of the acquisition and Dietrich\u2019s departure, the MassRoots founder claimed.<\/p>\n<p><a href=\"http:\/\/www.thecannabist.co\/2017\/10\/19\/massroots-cannaregs-acquisition-nixed-isaac-dietrich-scott-kveton-ceo-switch\/90371\/\">The CannaRegs deal fell through at the time of Dietrich\u2019s resignation<\/a>. CannaRegs\u2019 CEO Amanda Ostrowitz pulled the plug and sought to distance herself and her firm from MassRoots.<\/p>\n<p>\u201cI wouldn\u2019t want to give anyone a reason to doubt CannaRegs for being involved in petty drama,\u201d Ostrowitz said last week.<\/p>\n<p>Last week, MassRoots reported that <a href=\"http:\/\/www.thecannabist.co\/2017\/11\/14\/massroots-q3-sec-filing\/92391\/\">revenue and losses tanked<\/a> during the most-recent quarter \u2014 a performance that <a href=\"http:\/\/www.thecannabist.co\/2017\/11\/16\/massroots-investor-conference-call\/92325\/\">directors and executives attributed as reasons for Dietrich\u2019s removal<\/a>.<\/p>\n<p>\u201cI think that if the CannaRegs acquisition had gone through, our revenue would have been significantly higher, and in fact would have grown year-over-year,\u201d Dietrich said, adding that he believes that \u201cpart of the reason why the results were so weak, in my opinion, was the very rocky integration of Odava and the Odava team.\u201d<\/p>\n<p>During the third quarter, MassRoots shrank in size significantly \u2014 dropping from 20 employees to about a half-dozen people, Dietrich said.<\/p>\n<p>\u201cScott and I were not on the same page, the board and I were not on the same page,\u201d he said. \u201cI think that no one would say that the (third-quarter) results were strong by any stretch. There\u2019s a lot of room for improvement.\u201d<\/p>\n<p>Dietrich\u2019s vision includes settling into the cryptocurrency venture initiated during his tenure and, most significantly, aggressively growing MassRoots\u2019 market share in California, he said.<\/p>\n<p>If successful, \u201cWe have a new board of directors, and we will immediately begin implementing our plan to dominate California next year,\u201d Dietrich said. \u201cThis is ultimately what boards of directors are supposed to do \u2014 represent shareholders.\u201d<\/p>\n<p>Shares of MassRoots (OTC: MSRT) closed Monday at 16.16 cents, up 0.16 cents, or 1 percent. The stock traded as high as $1.18 in the past 52 weeks.<\/p>\n<blockquote class=\"twitter-tweet\">\n<p lang=\"en\" dir=\"ltr\">Earlier today, I filed a proxy statement for a shareholder vote to replace <a href=\"https:\/\/twitter.com\/MassRoots?ref_src=twsrc%5Etfw\">@MassRoots<\/a>&#8216; Board of Directors. I would greatly appreciate your vote to get the company on the right track, proxy cards will be available soon!! <a href=\"https:\/\/twitter.com\/search?q=%24MSRT&amp;src=ctag&amp;ref_src=twsrc%5Etfw\">$MSRT<\/a> (1\/3)<\/p>\n<p>\u2014 Isaac Dietrich (@Isaac_Dietrich) <a href=\"https:\/\/twitter.com\/Isaac_Dietrich\/status\/932739521271103488?ref_src=twsrc%5Etfw\">November 20, 2017<\/a><\/p>\n<\/blockquote>\n<blockquote class=\"twitter-tweet\">\n<p lang=\"en\" dir=\"ltr\">Unfortunately, members of the Board (Ean Seeb, <a href=\"https:\/\/twitter.com\/trippkeber?ref_src=twsrc%5Etfw\">@trippkeber<\/a>, and Terry Fitch) have resorted to a smear campaign against me as they know they do not have the votes to win. This is a reflection of their character and desperation. <a href=\"https:\/\/twitter.com\/search?q=%24MSRT&amp;src=ctag&amp;ref_src=twsrc%5Etfw\">$MSRT<\/a> (2\/3)<\/p>\n<p>\u2014 Isaac Dietrich (@Isaac_Dietrich) <a href=\"https:\/\/twitter.com\/Isaac_Dietrich\/status\/932739791640084480?ref_src=twsrc%5Etfw\">November 20, 2017<\/a><\/p>\n<\/blockquote>\n<blockquote class=\"twitter-tweet\">\n<p lang=\"en\" dir=\"ltr\">I look forward to winning this vote by a wide margin (as we&#8217;ve been doing since high school!) and building <a href=\"https:\/\/twitter.com\/MassRoots?ref_src=twsrc%5Etfw\">@MassRoots<\/a> into a cannabis technology powerhouse!!! <a href=\"https:\/\/twitter.com\/search?q=%24MSRT&amp;src=ctag&amp;ref_src=twsrc%5Etfw\">$MSRT<\/a> (3\/3)<\/p>\n<p>\u2014 Isaac Dietrich (@Isaac_Dietrich) <a href=\"https:\/\/twitter.com\/Isaac_Dietrich\/status\/932740041163472896?ref_src=twsrc%5Etfw\">November 20, 2017<\/a><\/p>\n<\/blockquote>\n<div class=\"entry-meta-author\">\n<div class=\"authorimage\"><a class=\"url fn n\" href=\"http:\/\/www.thecannabist.co\/author\/awallace\/\" rel=\"author\"><img src=\"https:\/\/cannitrol.com\/blog\/\/wp-content\/uploads\/2017\/11\/massroots-founder-initiates-proxy-battle-to-overthrow-denver-marijuana-firms-board-leadership.jpg\" class=\"authormug\" \/><\/a><\/div>\n<p class=\"author-desc\">Alicia Wallace joined The Cannabist in July 2016, covering national marijuana policy and business. In her 14 years as a business news reporter, her coverage has spanned topics such as the economy, natural foods, airlines, biotech, retail,&#8230;<\/p>\n<\/div><\/div>\n<\/p><\/div>\n<p><!-- .row --> <\/p>\n","protected":false},"excerpt":{"rendered":"<div class=\"media_block\"><\/div>\n<p>&#8220;I strongly believe that the board must be reconstituted to ensure that the interests of the shareholders are appropriately represented,&#8221; Dietrich wrote in the SEC filing made Monday. <\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[5062,6811,7317,7396,6813,77,5667,7397,9,5019,7060,1,3,5219,61,1736],"tags":[5063,6816,7318,7398,6818,2655,5673,7399,5022,7062,5234],"_links":{"self":[{"href":"https:\/\/cannitrol.com\/blog\/wp-json\/wp\/v2\/posts\/7868"}],"collection":[{"href":"https:\/\/cannitrol.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/cannitrol.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/cannitrol.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/cannitrol.com\/blog\/wp-json\/wp\/v2\/comments?post=7868"}],"version-history":[{"count":0,"href":"https:\/\/cannitrol.com\/blog\/wp-json\/wp\/v2\/posts\/7868\/revisions"}],"wp:attachment":[{"href":"https:\/\/cannitrol.com\/blog\/wp-json\/wp\/v2\/media?parent=7868"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/cannitrol.com\/blog\/wp-json\/wp\/v2\/categories?post=7868"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/cannitrol.com\/blog\/wp-json\/wp\/v2\/tags?post=7868"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}