4Front Advisors, part of the Arizona-based multistate marijuana firm 4Front Holdings, won an $8.7 million arbitration award against Nevada-based CWNevada and NuVeda for breach of contract in failing to pay fees for services provided.
Kris Krane, 4Front Holdings’ co-founder and president, told Marijuana Business Daily the award validates 4Front Advisors’ work in helping the two companies secure cannabis licenses.
Krane noted that in the early days of the cannabis industry – when capital was extremely hard to raise – consultants often helped clients win licenses and get operational for a small fee and then a percentage of the licensees’ future revenues for a period of time.
“It met the needs of clients at the time,” Krane said. “But we don’t do it that way anymore because we found collection a real problem.”
The arbitration award was disclosed in a recent Eighth Judicial District Court filing in Clark County, Nevada, in which 4Front Advisors is asking a judge to confirm the arbitration award.
CWNevada officials and company attorneys didn’t respond to emails and calls for comment. Jason Wiley, NuVeda’s attorney in the arbitration case, declined to comment.
CWNevada owns cultivation and processing operations in addition to three Las Vegas dispensaries under the Canopi brand.
Krane said he couldn’t disclose specifics about the business relationship between CWNevada and NuVeda because of the confidentiality of the arbitration.
According to court records, a three-arbitrator panel ordered CWNevada to pay 4Front Advisors $4.99 million and NuVeda to pay $3.74 million. The consulting contracts dated to 2014 and 2015, according to court documents.
CWNevada faces a number of financial fraud allegations. An attorney representing the company denied the allegations.