Vermont marijuana entrepreneur sues MSO Slang for fraud in merger deal

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Executives of Toronto-based marijuana multistate operator Slang Worldwide allegedly hid their financial challenges when negotiating to acquire a Vermont-based cannabis operation, according to a lawsuit.

Shayne Lynn, former owner of vertically integrated High Fidelity, claims in the August suit that Peter Miller, Slang’s co-founder and ex-board chair; Christopher Driessen, a former CEO; and the company are guilty of fraud and negligent misrepresentation, Vermont alternative weekly Seven Days reported.

Slang bought High Fidelity, the parent company of cannabis retailer CeresMed, in a stock-and-cash merger valued at $17.25 million in June 2021 – just before the state launched its adult-use market.

According to the lawsuit, Slang allegedly failed to disclose the Canada-headquartered company was badly in need of cash to continue and that the acquisition would help secure a loan.

Lynn said in the filing that he learned about that situation after the merger closed, and, under terms of the deal, he had taken his seat on the Slang board of directors.

Months later, Lynn said, there was a corporate restructuring and he and colleague Bridget Conry were fired from Slang.

Conry and Lynn now have plans to open a marijuana store of their own called High Fidelity, Seven Days reported.

Neither Slang nor Lynn would comment further about the lawsuit, according to the media outlet.

Slang has operations in 12 states and Puerto Rico, according to the company website.

Shares of the company trade on the Canadian Securities Exchange as SLNG.