Outrage as medicinal cannabis auction pulled early and bidders shut out

Thursday, 30 January 2025

Prospective buyers of equipment from an embattled medicinal cannabis company were left disgruntled and out of pocket when the online auctions were removed, some after reserves were met.

Christchurch company Medical Kiwi, also known as Aether Pacific Pharmaceuticals Ltd, entered voluntary administration in November citing “significant financial challenges” for why it owed creditors nearly $9 million.

The entire contents of its Christchurch indoor cultivation factory were put up for sale on Turners’ website and Trade Me. Several people in the medicinal cannabis industry began bidding on the items, which were required to be picked up from the company’s former Christchurch site.

However, despite some leading bidders surpassing the reserve price, the multi-day auctions were removed just hours before they closed and all items sold to an one offline bidder.

Turners said it could remove auctions at any time, while Trade Me said an auction could be pulled up to an hour before closing - but its terms and conditions state items that meet the reserve must be sold to the highest bidder.

Tauranga’s Cam Dynes said he spent $3500 travelling to Christchurch for the auction and to complete due diligence on the items.

He also paid electrical experts to check some items, including a dehumidifier, he said.

“I … spent money on a motel, hire car, went to see the items and was ready to bid on them. I was just driving to the motel to start bidding when everything was taken down.

“That’s shocking. Someone has pulled a bigger cheque book. It’s not ethical on so many levels,” he said.

Medicinal cannabis grower Jesse O’Steen said he was bidding while the auctions still had hours to run and no ‘buy now’ option.

“That seems wrong to me. The bidding had just started. Some of the items only had $1 reserves. There were probably 500 items. I was just setting up auto bids and I was leading the bid on 48 lights with a bid of $1500, but I was prepared to bid a lot higher.”

Another North Island grower, Daniel, said he was leading the bids for several items, with the reserves met, when everything was wiped with between one and three hours to go.

“I had already made significant investments in travel, accommodation, and other expenses to view the items, and I even flew multiple staff members down to assist with disassembling the equipment, in preparation for winning the bidding,” he said.

The Press has seen screenshots of items that had reserves met.

Trade Me’s conditions say sellers should list items with the intention of selling through Trade Me, must not advertise items on other forums, and must sell to the highest bidder if the reserve price is met.

“At the very least it’s a dick move from Turners and a breach of Trade Me’s Ts & Cs including the term ‘Don’t be a dick’ - which is a legit requirement from Trade Me,” said Consumer New Zealand chief executive Jon Duffy, who was previously head of trust and safety at Trade Me.

“I would also suggest that Turners are misrepresenting the nature of the auction if they are also selling the items elsewhere and not disclosing it.”

Turners said everything was above board and this was in fact a “fairly common occurrence”.

Duffy said unsuccessful bidders could take Turners to the Disputes Tribunal to try get the auction enforced, or complain to the Commerce Commission under the Fair Trading Act, Duffy said.

“If [Trade Me] are letting Turners away with this sort of behaviour just because they are a large high-paying customer, it doesn’t do much for the integrity of the site.”

Medical Kiwi’s voluntary administrator, Peter Drennan, said the auctions were pulled after they received an offer significantly higher than all of the other bids.

It was in the best interests of the company’s creditors to accept the offer to maximise returns to them, he said.

“When we reviewed the offer we did request confirmation and Turners confirmed to us that they can pull auctions at their own discretion.”

Zoe Reece from Ora Pharm said she was one of those who were surprised and taken aback when the items were all pulled.

Christchurch’s Cane McNeill said he was interested in the items to resell in his horticulture shop.

Turners marketing manager Sean Wiggans said sellers were well within their rights to withdraw auctions for any reason until the reserve price had been met on Trade Me.

When told the reserves had been met on some of the items, he said a seller could withdraw any time before the auction closed.

“There is also no limitation on selling an asset using more than one method, and no requirement to disclose if this is the case.

“There is no foul play here at all, it is a fairly common occurrence.”

A Trade Me spokesperson said the site allowed sellers to withdraw listings, except in the final hour of an auction.

The Press previously reported Medical Kiwi director Aldo Miccio, a former mayor of Nelson, had set up a new company in the UK before Medical Kiwi’s voluntary administration.

Miccio said he did not buy the assets and had no knowledge of the auctions.

Drennan confirmed he was not aware of any link between the buyer and the former or current directors of the company.