Steve Kubby ran for Governor of California as a Libertarian in 1998, was the runner up for the LP VP nomination in 2000 and 2008, and was a candidate for the party’s presidential nomination in 2008. I worked on that last campaign. Since then, he started a cannabis medicinal company with Libertarian National Committee member and fellow 2008 LP Presidential nomination candidate Mary Ruwart, her husband Ray Carr, and LNC member Lee Wrights. More recently, there was a falling out with some of the financial officers of the company. Their side of the story is here.
From his home earlier today, Cannabis Science, Inc. founder Steve Kubby talked about his most recent foray into the business world. While some would certainly view what he has been through the last couple of weeks as a series of horrible setbacks, Kubby says he has no regrets. He expects the same fortitude which allowed him to triumph over the deadly adrenal cancer doctors predicted would take his life thirty-five years ago to sustain him through his enterprise’s crisis. “The potential to save countless lives is too precious to relinquish,” he says.
Paulie: Can you give me a quick synopsis of what the controversy over the management of Cannabis Science Inc. was about?
Steve: A month ago I was CEO of my own pharmaceutical company. Today, I’m the victim of a hostile corporate takeover which has left that company in the hands of individuals whom I believe are putting quick profits ahead of building a viable company which can bring a valuable product to market. After receiving legal counsel concerning the “appearance of fraud” by CSI board members, I had no choice but to tender my resignation from the company I founded more than a year ago. Within hours of my resignation, CSI Chief Operating Officer Ray Carr, VP of Research & Development Mary Ruwart, and Director of Communications Lee Wrights, also resigned.
P: What was the reaction of other board members to your resignation?
S: Following these departures, CSI filed a libelous SEC 8-K report which alleged improper behavior by the former CEO and failed to include my letter of resignation. An accurate 8-K must, by law, be filed with the Securities and Exchange Commission whenever any major change occurs in the structure of a publicly traded company. I notified CSI of their failure to abide by the SEC regulations, but was ignored. The deliberately deceptive and incomplete 8-K filing is yet another example of the type of apparent SEC rules violations which my staff and I could no longer abide.
P: Several CSI officers have made counter-claims about alleged improprieties that you were involved in with the company. Can you address those?
S: In response to the new CSI regime’s claims of impropriety — the 8-K alleges that a personal loan to me from Carr and Ruwart constituted a violation of my fiduciary duties — I would point out that neither Ruwart nor Carr were associated with CSI when they loaned me the money; that repayment of the loan was personally guaranteed by me, not the company; and that the lenders’ option of transforming their loan into stock involved only my own personal portfolio of shares. None of my actions in any way compromised my ethics nor anyone else’s, nor did they expose or endanger the company in any way. The current directors of CSI are attempting to cover up their own malfeasance by turning an aboveboard personal loan into some sort of nefarious corporate deal. What they allege simply never happened. These kinds of baseless allegations are typical of the goings on which ultimately left me no choice except to dissociate myself from the firm.
P: What was the deciding factor in your leaving the company?
S: The straws that broke the camel’s back, were two attempts by CSI directors to divert investor money to a private, rather than corporate account. In response, I directed the funds into the appropriate corporate account and began to pay the company’s outstanding bills, leading to the battle which resulted in my departure from the company. My obligation to the investors is to see that their money is either properly handled or returned. The first step in achieving that goal has been to segregrate myself and CSI’s honest personnel from the cannibals who are devouring the company’s operating capital. Now that that’s been achieved, we’ll be going to war to protect the shareholder’ interests.
P: What is your reaction to the increase in Cannabis Science stock since you left to 80 cents a share?
S: The explanation is simple. The deal that created the increase in stock
price was closed and signed by me, shortly before my resignation. In
addition, a story and video that included me and mentioned Cannabis
Science, appeared last week in the Wall Street Journal. That is the
only reason that the stock went up after I left.
P: Will you be able to resurrect a new version of the company to bring your product to market?
S: I’m confident in my product and in the core company personnel with whom I’m still working to bring that product to market. Sometimes you have to do what you have to do, I started CSI to help people, to save lives and improve the quality of lives. That’s still my goal, and I don’t plan on stopping until it’s achieved. It’s not in my nature to give up, I don’t know the details right now but I won’t let a little thing like this get me down.