Nickeled and Dymed 

The collapse of Dionymed Brands, which traded on the stock exchange as DYME, highlights the factors at work in the great cannabis crash.

click to enlarge dyonymed.jpg

Before DionyMed Brands crashed and burned last October, when it still appeared to outside observers as a growing, apparently successful cannabis company, the first thing many people noticed about it was that it was downright bewildering. It had its fingers in several different parts of the business — cultivation, manufacturing, distribution, sales technology, home delivery — in several different states. And it went by a whole bunch of different names, including subsidiaries, brands, and names of acquired companies: DionyMed, DYME Distribution, Herban Industries, Rise Logistics, Winberry Farms, HomeTown Heart, Chill, and others.

"It was all really confusing," said Chris Romaine, an Oakland photographer specializing in cannabis, who did work for DionyMed. "I was getting all these checks with different names on them."

It's far from unique for a diversified company to employ a multitude of different brand names, and there's nothing inherently nefarious about it. Many cannabis companies in particular do that. But after such a company implodes, the plethora of entity names can make legal mop-up operations that much more challenging, and the panoply of names look a little less like marketing and a little more like subterfuge. Whether that's the case with DionyMed can't be known, at least for the moment, but it made Romaine wonder about it — not so much when he was still shooting DionyMed's photos, but in retrospect. The company had piled up a lot of names over the short few years it was in business.

It also piled up a lot of debt. Romaine, who owns Kandid Kush Studios, is one of a large number of people and entities who are DionyMed's creditors. The approximately $40,000 he says he is due is a pittance compared to the tens of millions the company owes its major creditors. Who will get what is now being determined, as the company is in receivership in Canada where DionyMed had issued stock, though most of its executives lived and worked in the Bay Area.

"Everybody I worked with there was really cool," Romaine said. He took pictures for DionyMed's cannabis-delivery platform, Chill, and for Winberry Farms, a pot grower and manufacturer based in Oregon, among others. For months, whichever entity he was working with paid him promptly and reliably: 50 percent up front and 50 percent upon completion of his assignment. "Everything always went really smoothly," he said.

Until it didn't. Last April, the people he was working with at Chill on what he called a "huge project" — taking product photos for the Web site — told him they didn't have a check with them to give him his deposit. "I was uneasy, but I shot anyway," he said. Afterward, "they said the check was cut, then they said it again. That went on for months."

Romaine would never receive another dime from DYME, the company's stock-ticker symbol as well as the name of its distribution arm. People on stock message boards made note of the irony in the late summer and fall, when DYME's stock fell to just over 10 cents a share, having reached a high of $3.83 just the previous January.

It's part of Romaine's business to stay abreast of what's happening in the cannabis industry, but even some finance professionals had missed what in retrospect look like signs of trouble. The fall of DionyMed is all in the public record, but to see the story, you have to read through a lot of press releases and dry accounts from trade publications. Amid the prosaic language is a rather alarming tale of what several people say was a mix of greed, hubris, and incompetence.

DionyMed was formed in 2017 by Edward Fields, who had spent his whole career before that in software. He was the CEO of ProductFactory, a marketing executive at Agile Software, and the founder and CEO of HotChalk, which makes educational software products. He left HotChalk in 2016 "to pursue opportunities in cannabis."

Pursue them he did, with great vigor. Starting in 2018, the next year and a half was a whirlwind. Large sums of money were raised and borrowed. Companies were acquired. DionyMed began to bill itself as "a multi-state cannabis brands platform, supporting cultivators, manufacturers, and award-winning brands in the medical and adult-use cannabis markets."

Fields began giving interviews, including video for cannabis-media sites. He used many marketing buzzwords and deployed the phrase "the cannabis space" a lot. He came across as basically knowledgeable, at least on the surface, and he was generally introduced as a mover and shaker — a real can-do kinda guy. In one video last February where he talked up the company's stock, he claimed DionyMed shares offered investors a "long-hold experience." Shares in DionyMed were trading that day at $3.73. Six months later, they were trading at 84 cents. Two months after that, they were worthless.

"We are very, very big in the space," he told his interviewer. "Time is the most powerful weapon on our side."

Fields did not respond to repeated requests for comment. Calls to various top DionyMed executives and board members similarly resulted in silence. Reached by phone, Michelle Sitton, the chief marketing officer, declined to comment, referring questions to the company's attorney, Chris Wimmer, who never responded.

People outside the company, at least some of whom are in litigation with DionyMed or are planning to be, are generally themselves loath to say much, at least with their names attached. Romaine is one of an unknown, but apparently large, group of vendors and former employees who say they are owed money. One former, low-level employee of the company's short-lived online storefront, Chill, said of Fields: "That guy is a scumbag." This person chose not to elaborate. Another vendor, who asked that even his line of business be kept out of this article, said that, like Romaine, the people he worked with directly were fine folks but that the company "seems like it was a rip-off right from the start."

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