Marijuana industry giant Verano Holdings of Chicago was named in a federal lawsuit filed in Colorado by state resident Nicholas Nielsen on Monday.
Verano Holdings currently runs eight cultivation facilities and 56 retail operations, with plans to expand to 76 locations in the near future. The company also recently went live on the Candian Stock Exchange with an estimated worth of $3 billion dollars.
According to their own website, Verano “is a leading, vertically-integrated, multi-state cannabis operator in the U.S., devoted to the ongoing improvement of communal wellness by providing responsible access to regulated cannabis products. With a mission to address vital health and wellness needs, Verano produces a comprehensive suite of premium, innovative cannabis products sold under its trusted portfolio of consumer brands…”
The marijuana firm is now in the middle of a messy lawsuit, with multiple entities vying to point the finger at the others to keep from ending up liable for damages. Also named in the lawsuit are Harvest Health and Recreation, a company who was previously in negotiations to buy out Verano, and the Natural State Wellness Enterprise, which is part of the cannabis business in Arkansas and is tied to the cultivation center Nielsen was working with.
Lawsuit Against Verano
It sounds like a plot in a cheesy weed movie, where the main character is the small-time employee and ends up as a patsy for ‘the man’. Plaintiff Nicholas Nielsen has filed suit in relation to his arrest in January 2020, stating that the cultivation project he was busted for started at the behest of his employers, and that they told him it was legal and safe to begin production in his own home.
He names more than fifty individuals, including employees and executives at both Harvest and Verano, investors, and financial institutions. Although at present no charges have been filed against either company or any individuals, Nielsen’s attorney has communicated his willingness to testify in court against those listed in the suit.
Nielsen was targeted for investigation by the Arkansas Alcoholic Beverage Control Division after it was reported that plants at the Newport, Arkansas cultivation center were transplanted from Nielsen’s home.
Nielsen was arrested when the following were located at his home
- 30 pot plants and more than 9 ounces of marijuana
- 380 THC vape pens
- THC edibles and assorted infused products
- Grow tents with lighting
- Scales and paraphernalia
According to the Chicago Sun-Times, Nielsen claims in the suit that Harvest initially told him that it was legal to grow the plants at the makeshift cultivation facility in his home, which the company allegedly financed. But following the raid, the suit notes that Nielsen was fired by Harvest “as a result of his arrest.”
Nielsen also alleges that the cultivation project he had set up in his home was started from clippings smuggled on a flight from Chicago to Memphis by a former Verano employee. He states that Verano manager, Michael Frontier, placed the trimmings in Whole Foods salad containers to get through airport security, rented a car, and brought them to him with instructions to begin planting while they waited for legalization efforts to finalize. Michael Frontier is no longer a Verano employee, and was indicted in 2019 for involvement in an illegal gambling ring.
The lawsuit states that the involved organizations operated in violation of the Racketeer Influenced and Corrupt Organizations Act (RICO), by initiating interstate drug trafficking. Regardless of how far-fetched the allegations may seem, the potential fallout from this case could be detrimental, specifically for Verano as this is not the first lawsuit they have had leveraged against them as of late.
Cannabis Entity Named in Several Lawsuits
Verano has now been named in lawsuits three consecutive operating years. Back in 2019, previous partner entities filed suit for fraud, claiming Verano shut them out of business ventures in which the company expanded without including them.
In 2020, the company was sued for discrimination against a Black employee after he was terminated for not wanting to deliver product illegally in the state of Maryland.
And now, Verano is at the center of this latest fiasco. And they definitely refer to it as such, claiming that Nielsen is lying and has concocted a conspiracy.
Chicago Sun Times reported: “Knowing his client was legally bound to take any dispute to binding confidential arbitration, Mr. Nielsen’s lawyer threatened to unleash a smear campaign by filing a lawsuit filled with damaging false information unless we paid him millions of dollars,” spokesman Terry Fahn (Verano Holdings) said in a statement. “He went so far as to threaten what he believed the headline emanating from the lawsuit would be.”
Both representatives of Verano Holdings and Harvest Health are refuting the facts of the suit, and are already taking steps to counter the allegations made by Nielsen. The court case is bound to be entertaining and full of drama, with a possible twist ending. Stay tuned for more on this case as developments happen.
Additional Resources:
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