A California arbitration panel has awarded an investment firm $1.875 million from a major infused-products and concentrates company, Bhang Chocolate.
The panel said Oakland-based Bhang breached an agreement it had with Mentor Capital in Ramona, California, “by failing to deliver” shares of stock to the investment firm, Mentor Capital said in a news release.
The two companies’ relationship dates to March 2014 when Mentor Capital, which in recent years has focused on the cannabis sector, announced it had acquired 60% of Bhang for $39 million.
But soon afterward Bhang terminated the deal, leveling breach of contract accusations against Mentor and asserting the company failed to provide it $7.5 million as agreed upon in their contract. Mentor had invested $1.5 million in Bhang by that point. But Bhang didn’t return the money after the deal fell apart.
According to the Mentor press release, Bhang must return the $1.5 million investment made by Mentor, as well as $375,000 in interest. The arbitration panel rejected Bhang’s request for damages, the released added.
Bhang could not be immediately reached for comment. The company has grown significantly in recent years, selling its products in five states, Washington DC, and the Netherlands.