The reason Capital Mining has been in a trading halt for a week has nothing to do with mining and everything to do with drugs.

Capital (ASX:CMY) is planning to announce, on or before August 24, what’s going on with its subsidiary Capital Cannabis.

The company has been contacted to explain why it went hard on cannabis in 2015.

Capital Mining was a gold and rare earths explorer until about September 2014, when it began making a rather diverse range of investments.

The following month Capital Mining signed a deal to buy 10 per cent of Chinese cloud-learning platform HexStudy for $5.7 million, with an option over another 20 per cent for $14.3 million within the following 12 months.

That fell through in February 2015. The minerals explorer “was unable to complete satisfactory due diligence on the acquisition”.

The very next month Capital Mining went into medical marijuana, making offers to buy 49 per cent of Canadian grower broken Coast Cannabis; all of Cannan Growers; all of US hemp products company Nutrawerx; and in April the Tasmanian company Cannabinoid Extracts Australia.

The company conceded in March 2015 that its foray was “a significant change in the nature and scale” of its activities.

You can’t say the directors at the time, Robert McCauley, James Ellingford and Peter Torney, didn’t fully commit to the new strategy.

Unfortunately, the strategy soon began to unravel.

All the deals were cancelled by July 2015.

“Capital will now continue with its core business of being an exploration company,” the company told the market.

Intriguingly, the same month these deals hit the rubbish heap, Capital Mining received a major investment from Chapmans, which donated two of the three current directors, Anthony Dunlop and Peter Dykes.

Chapmans invests in small companies it thinks will provide big returns. This year Chapmans has been going deep into – you guessed it – cannabis companies.

Capital then, for all intents and purposes, returned to the business its name suggested.

But the weed business was not over.

In September 2016 Capital Mining called in debts from Broken Coast Cannabis.

As part of the acquisition, it loaned the Canadians $500,000 — but demanded it back when they decided not to go through with the deal.

The pot company didn’t pay.

Mediation ensued and this year an agreement was reached: a $250,000 payment and the right to take the rest as an investment in Broken Coast Cannabis.

Capital Mining set up Capital Cannabis, its new marijuana arm.

In May “Capital also met with a number of other medicinal cannabis companies in North America in relation to potential investment opportunities for Capital subsidiary company, Capital Cannabis, in the medicinal cannabis sector,” the company said.

“Capital advises that it will… ensure that any medicinal cannabis opportunity pursued by Capital Cannabis is structured in the most appropriate way… to ensure its corporate and operational success and that the core minerals exploration focus of Capital Mining remains unaffected.”

Capital Mining now has a big update due for Capital Cannabis.

We wait with baited breathe to find out whether this time around, it will be the killer weed they’re looking for. Or whether once again it’s just tea leaves and dried coriander wrapped in tin foil.

Capital Mining had no earnings in the June quarter but burned through $1.3 million, leaving $1.6 million in the bank.

Its shares last traded near the bottom of its 52-week range of 0.4c to 4c. The company’s market value is a little over $4 million.

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