Marijuana firm Verano sued for $135 million in Nevada related to licenses

Nevada mountains, photo by Andrey Grinkevich

Multistate operator Verano Holdings faces a $135 million lawsuit in Nevada for alleged fraud in excluding its Nevada partners from a recent licensing round in which the Illinois-based firm won 11 additional recreational cannabis store licenses.

The suit, filed earlier this month by Naturex and BB Marketing in the state’s Eighth Judicial Court, alleges that Verano defrauded its Nevada partners into believing the licensing applications would include them as well as Verano.

The 11 claims include an allegation that Verano also misappropriated trade secrets in filing the applications.

George Archos, Verano’s CEO, said in a statement that “based on what we know of the allegations … we do not believe the complaint has merit. We intend to defend aggressively against these claims.”

Here are some key aspects of the complaint:

  • Naturex owns and operates the Zen Leaf dispensary in Nevada. Half of Las Vegas-based Naturex is owned by a Nevada limited liability company called BB Marketing and half by a Verano entity.
  • During summer 2018, the Naturex partnership decided that Verano would take the lead on the applications to be submitted in a new rec marijuana licensing round. The defendants claim Verano instead applied through its cultivation facility, Lone Mountain, and “cut out” the plaintiffs.

The $135 million in damages requested include:

  • $10 million because of an alleged breach in fiduciary duties.
  • $75 million in a lost equity stake in the new licenses.
  • $50 million in lost cultivation sales to the dispensaries. (The Nevada group also owns a cultivation facility.)
5 comments on “Marijuana firm Verano sued for $135 million in Nevada related to licenses
  1. Travis on

    If they had a contract for all to be included 100% on every licensed each one gets them yes they should be held accountable to pay the money if not then no it’s pretty simple.

    Reply
    • Sheri Bowers on

      No contract, and separate licenses read complaint ! Looks like a disgruntled partner! Also Frey brothers in multiple other lawsuits

      Reply
  2. Nunya on

    It’s ridiculous that people think they can “license” a weed that would naturally grow in the ground if it weren’t for politicians.

    Reply
  3. Johnny M on

    The Frey brothers try to weasel their way in to deals any way they can. Looks like they are trying to muscle a group that is not giving in. Agree with Travis, if there is a contract they deserve what they are asking, if not this won’t even make it to trial. Also, what cultivation do the Frey brothers own?

    Reply

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