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Little Homework Done on Hemp Company

Posted on March 16, 2000

By Roberta Rampton, The Western Producer

The hemp industry should have done more homework before doing business with Consolidated Growers and Processors Inc.

That’s the opinion of Gero Leson, an environmental consultant from Berkeley, California, who was CGP Inc.’s first president.

CGP recently closed its offices in Winnipeg and announced it intends to declare bankruptcy.

Leson said he knew little about Susan Brana, the majority shareholder and chair of CGP Inc., before he went to work with her in 1997.

“I’m to blame, and so is everybody else,” he said in an interview at the recent Hemp 2000 conference.

Leson first became involved with industrial hemp when he helped organize an international symposium on the crop in 1995.

Brana contacted him the following year as a venture capitalist interested in funding hemp projects. She hired him to do some consulting work, and paid him for his work, Leson said.

Together with Winnipeg hemp store owner Martin Moravcik, Brana and Leson formed CGP Inc. in the summer of 1997.

The goal was to jump-start hemp production and processing, Leson said, and to take the company public to make money.

The emerging industry was short of capital, he said, and he thought the economies of scale Brana sought would be a good idea.

But over time, Leson said he came to realize Brana was most interested in profits from company shares.

She wanted to promote the company’s big vision, but Leson said he was uncomfortable with hyping too much, too quickly.

“Sue Brana thought I was too negative,” Leson said.

By April 1998, Leson wanted to leave, but couldn’t agree on terms with Brana, and was fired.

A difference in management philosophy and style helped lead to his departure, he said.

Brana has not responded to repeated requests for interviews. Throughout CGP’s time in the spotlight, Brana did not give interviews to reporters.

Brana, 46, grew up on a farm in Ohio, and still keeps a residence in the state, according to sources.

Her biography in CGP documents lists experience with several banks between 1975 and 1989.

More recently, Brana ran a stock broker/dealer firm called Alt Capital Inc. out of an office in Los Angeles.

The office address and phone number were shared by Gain Integrated Systems, a shell company owned by Brana.

The same address was used for CGP Inc., along with a North Hollywood address for Dugan and Associates Construction Management Inc.

The North Hollywood address was also used for Ntech Corp., a start-up nanotechnology development company with which CGP had joint venture projects.

Persuasive Personality: Brana was convincing in her vision to increase hemp acreages quickly, said Leson, even though he believed she tried to grow CGP Inc. too large, too soon.

“You never quite knew if you were right, or if Sue Brana had found somebody to buy 10,000 pounds of oil,” Leson said.

“You always think maybe there’s something you just don’t know.”

Since his time with CGP, Leson said he has learned about the obstacles for hemp in the pulp and paper and textile sectors.

“It’s much more complicated to get into those markets.”

He was alarmed when he learned last summer how much hemp CGP had contracted for 1999.

“I thought it was misleading to do that.”

Leson said Brana gave the impression through anecdotes that she had considerable experience starting and running businesses.

Not all her stories were rosy, said Leson, making her track record seem realistic.

Leson said he doesn’t believe CGP was a fraud or a scam. But he does think industry leaders, including himself, should have done more checking into Brana’s work experience.

“I think we’re all to blame on not really insisting on seeing a résumé.”

Copyright © 2000, The Western Producer. All rights reserved.