(This story has been updated with comment from Captor Capital.)
A longtime Southern California marijuana entrepreneur and executive filed suit against Toronto-based Captor Capital – a former financial partner of MedMen Enterprises – for fraud, breach of contract and other misdeeds and is seeking at least $2.8 million in damages.
Matt Longo, a founder of cannabis dispensaries in Santa Ana and West Hollywood that have operated under the MedMen brand name for years, filed his suit against Captor in Los Angeles County Superior Court on July 2, alleging that Captor pulled a “bait and switch” on him by promising company stock and wages that were not delivered.
MedMen is not involved directly in the lawsuit.
The suit contends that Longo is owed, in part, a portion of the $31 million sale to MedMen in 2019 of ICH California Holdings, a Captor subsidiary that owned the two shops in Santa Ana and West Hollywood. Both shops are still operated under the MedMen brand.
Longo’s suit also claims that Captor defrauded him in an acquisition deal for another company he founded, Mellow Extracts, in which he was promised 3.75 million shares of stock in I-5 Cannabis Holdings, one of many Captor subsidiaries.
The shares were supposed to be worth 1.5 million Canadian dollars ($1.1 million), but the suit alleges that Longo received only $525,000 worth of stock in Captor Capital.
Captor Capital released a statement about Longo’s suit in a July 10 investor update, saying:
“The company is aware that it has been named in a lawsuit commenced by Matt Longo … (but) the company has not yet been served with the complaint.
“This company believes that this lawsuit is without merit and intends to vigorously defend itself against it.”
A spokesperson for Los Angeles-based MedMen declined to comment.
Captor Capital trades on the Canadian Securities Exchange under the ticker symbol CPTR and on over-the-counter markets under the symbol CPTRF.
MedMen shares trade under the ticker symbol MMEN on the Canadian Securities Exchange and as MMNFF on the U.S. over-the-counter markets.
– John Schroyer