Trulieve Cannabis, Black entrepreneur trade barbs over alleged $24M debt

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Trulieve Cannabis and a Black cannabis entrepreneur in Ohio are leveling accusations at one another over an alleged unpaid debt of nearly $24 million that the Florida-based multistate operator has sued to recover.

Last week, less than two years after a “billion-dollar merger,” Florida-based Trulieve sued Harvest of Ohio, alleging $23.8 million in unpaid debts.

In October 2021, Trulieve acquired Arizona-based Harvest Health & Recreation in an all-stock deal that allowed Trulieve to expand to 11 states.

According to Benzinga, the deal also meant “financially assisting” four Ohio-based Harvest cannabis businesses, which won licenses in part because of preferential licensing for social-equity applicants.

Harvest of Ohio – the parent company also known as the Harvest of OH Companies – operates three retail medical cannabis dispensaries as well as a cultivation license.

Trulieve filed a complaint against Harvest July 14 in the Franklin County Court of Common Pleas, according to the Dayton Daily News.

The complaint alleges Harvest executives used the Trulieve loans to “pay themselves six-figure salaries while simultaneously asking (Trulieve) to lend them even more money,” the Dayton Daily News reported.

Harvest of Ohio’s majority owner is Ariane Kirkpatrick, who claims to be the first Black woman to own a vertically integrated business in the state.

Kirkpatrick received her licenses with some controversy.

In 2020, Harvest of Ohio “voluntarily” donated $500,000 to a state fund to settle “an ownership dispute” after the company was accused of misrepresenting its true ownership, the Cincinnati Enquirer reported.

In a statement Tuesday provided to MJBizDaily by Jeané Holley, Harvest of Ohio’s director of community and public relations, Harvest accused Trulieve of “undermining their pledge” to diversity, equity, and inclusion “in a bid to gain control” of the Ohio licenses.

According to Holley, both Harvest Health & Recreation and, later, Trulieve interfered with Harvest of Ohio management, charged inflated and “inappropriate” expenses to the company, and blocked recapitalization efforts.

The two companies had agreed not to litigate claims and negotiate a restructuring when Trulieve “abruptly and without advanced notice” ended those negotiations and filed last week’s suit.

“This approach to business is not new,” the statement reads in part.

“HHR and Trulieve’s management have used these strategies in other states and communities across the country, a fact we will prove in court.”

In a statement provided to MJBizDaily, Trulieve called Harvest of Ohio’s statement “an attempt to avoid paying Trulieve the $23.8 million we are owed.”

“We’re not tricked by it and no one else should be either,” the statement added.

“We loaned these companies money and they agreed to pay us back, which they now refuse to do.”

“We have a responsibility as a business and a fiduciary responsibility to our shareholders to collect this debt and we will pursue action to do so.”

Trulieve is a major player in U.S. cannabis, with more than 9,000 employees in 11 states.

Trulieve is also the major bankroller of a proposed marijuana legalization ballot initiative in Florida.

The company has contributed nearly $40 million to the campaign, which is currently under state Supreme Court challenge.