Marijuana Refinery Sues Boulder-Based Wana Brands Alleging $5 Million in Damages Following Failed Merger

COLORADO: A Colorado marijuana refinery, LP Capital LLC (LP), has sued Mountain High Products, which does business as Wana Brands, an edibles company, and the edible maker’s CEO following a failed merger. The refinery’s lawsuit (District Court, Boulder County, 2018CV30336) seeks monetary damages, to enjoin Wana from using and continuing to use certain business information learned during the merger negotiations and from continuing to employ a key employee it hired during the negotiations from LP.

According to the suit filed by Henderson-based refinery LP, Wana, which dominates Colorado’s infused product market and its part-owner and CEO, Nancy Whiteman, began merger discussions with LP in July 2017.

In building its vape strategies, the suit says LP had spent more than one year and approximately $2 million dollars hiring a marketing firm, an internal marketing person for brand design, packaging, and “go to market” strategy, a chemist to work on formulation and to build and equip a lab, two industry veterans to work on hardware, production and related vape strategies, acquiring Shift Cannabis for the company’s industry knowledge and contracts to develop the business plan and hiring a sales manager and other sales personnel.

LP’s lawsuit says merger discussions ended in December 2017 after its sales allegedly plummeted and several LP employees resigned allegedly in anticipation of the merger. LP’s key employee, a sales and new product designer, by then had been allowed to become an employee of Wana, the suit alleges.

LP owns and operates a marijuana products refinery in Adams County, Colorado, the suit says, adding that its product lines include marijuana “distillate oil” in the form of “vape” pen cartridges and syringes, as well as “solid states” products such as shatter and waxes.

MassRoots Files Suit Against Former CEO

COLORADO: MassRoots, Inc., a leading technology platform for the legal cannabis industry, announced that on November 14, 2017 it filed a lawsuit in District Court in Denver, Colorado against its former CEO, Isaac Dietrich. The complaint alleges, among other things, that Dietrich intentionally misappropriated Company funds and engaged in self-dealing by causing MassRoots to make unauthorized payments to him and third parties on his behalf, for his personal benefit, in various amounts totaling in excess of $250,000, which also constituted a wrongful conversion and civil theft of Company funds, and that Mr. Dietrich has been unjustly enriched as a consequence of the foregoing.  The complaint also alleges that Dietrich has intentionally violated the Separation Agreement he signed with the Company.

Scott Kveton, MassRoots CEO, stated “The days of Isaac Dietrich treating this Company like his personal piggybank are over.  It is not surprising to us that only a few days after we filed our lawsuit against him, he filed a preliminary proxy statement with the SEC with the intent to remove the Board and retract the lawsuit against him.  I have faith that the shareholders of this Company will see through this ruse and recognize the folly of putting Dietrich back in charge.”

Kveton continued, “Our last fiscal quarter was the worst quarter MassRoots ever recorded, and it was all Isaac Dietrich’s doing.  Moreover, misappropriation of Company funds and illegal drug use at the workplace are unacceptable on any level.  We intend to enforce the standstill provisions of the Separation Agreement as we believe engaging in a protracted proxy contest now would be a huge waste of our Company resources and a diversion by Isaac Dietrich to avoid the potential consequences of his wrongdoings. We have also been in touch with the appropriate local and Federal authorities on these matters.”

Bonney Lake Marijuana Ban Challenged

WASHINGTON:  Bonney Lake’s ban on recreational marijuana businesses has spurred two lawsuits, filed in Pierce County Superior Court recently, that seek to overturn the city ordinance adopted early this year.

One complaint claims the city’s moratorium and subsequent prohibition on pot retailers, producers and processors are unconstitutional.

The other suit contends the decision to ban pot businesses in the plateau city of more than 18,000 people was based, in part, on “a hearing that was conducted unconstitutionally.” It states a councilman prematurely stopped the attorney of a prospective marijuana retailer from speaking prior to the vote.

Councilman Dan Swatman says he followed proper procedure for public comment. He said the city is confident a judge will uphold its ban. 

 

Colorado Marijuana Legalization Spurs Racketeering Lawsuit

COLORADO:  A Colorado hotel franchise and two property owners filed lawsuits Thursday to bring a halt to the state’s legalization of recreational marijuana, citing violations of the federal Racketeer Influenced and Corrupt Organizations Act.

The federal lawsuits, which also list the anti-crime Safe Streets Alliance as a plaintiff, are the first of their kind challenging Colorado’s first-in-the-nation recreational marijuana market, which began operating in January 2014.

The lawsuits “ask the federal courts to order Colorado officials to comply with federal law and stop issuing state licenses to deal illegal drugs,” according to a Thursday statement on the alliance’s website.

“In addition to shutting down the operations targeted in its suit, Safe Streets hopes that its use of the federal racketeering laws will serve as a model for other business and property owners who have been injured by the rise of the commercial marijuana industry,” the statement said.

Lawsuit Filed Over Centralia Pot Store Ban

WASHINGTON:  Another lawsuit is challenging the authority of cities in Washington state to ban licensed marijuana businesses.

A prospective marijuana retail businessman sued the city of Centralia on Tuesday, saying the city’s moratorium is an unconstitutional ban on a legal activity.

Perry Nelson, proprietor of RIU420, filed the lawsuit in Lewis County Superior Court. The lawsuit seeks an order allowing Nelson to operate a pot shop.

Wenatchee’s ban on state-licensed pot businesses is also being challenged.

Children Taken from Medical Marijuana-Prescribed Parents in California

CALIFORNIA: A family from southern California is suing the City of Coronado after their children were taken away for nearly a year because the father admitted to legally smoking medical marijuana.

According to legal filings obtained this week by the Courthouse News Service, Michael Lewis and Lauren Taylor have filed a lawsuit against Coronado, CA, San Diego County and nine local police officers for what they say is a violation of civil rights that started with a routine visit from law enforcement in August 2011. [Read more…]