A Nevada company that won a contract with Louisiana State University (LSU) to run the school’s medical marijuana grow operation is being targeted by a rival that is questioning the firm’s financial stability.
CB Medical finished second in the bidding process for the LSU contract, which was awarded in June to Las Vegas-based GB Sciences. Now, the company’s chairman, physician Kenneth Perego II, is alleging that GB Science’s finances are “at best shaky,” The Advocate reported.
Perego wrote to the LSU Board of Supervisors that a federal investigation into GB Sciences’ finances could be “imminent” and suggested the company may have misled the U.S. Securities and Exchange Commission in stating it has raised enough capital to fulfill its financial obligations to LSU.
According to SEC filings, Perego wrote, GB Sciences has over $35 million in debt and only $54,099 in its August report, The Advocate reported. But the LSU contract calls for GB Sciences to contribute either $3.4 million or 10% of gross receipts to the school’s AgCenter.
GB Sciences Chairman and CEO John Poss said in a statement to The Advocate that his company “participated in a fair and transparent competitive process and we are honored to have been selected by LSU.”
The contract between LSU and GB Sciences hasn’t been finalized, an LSU spokesman told The Advocate, and school officials are “taking every factor into account.”