A lawsuit filed against owners of Santa Ana’s 420 Central – a higher profile cannabis shop in Southern California – accuses CEO Robert Taft, and executives Jorge Burtin and Jeff Holocomb, of defrauding investors. Amongst the laundry list of claims created, the complaint alleges:

  • Breach of Contract
  • Fraud
  • Breach of Fiduciary Duty
  • Conspiracy to Commit Breach of Fiduciary Duty
  • Dissolution of Partnership and Corporations
  • Turnover of Corporate Books and Records and
  • Injunctive Relief.


If you have to have counsel settling cannabis associated company disputes, our Los Angeles marijuana company lawyers can assist.

Difficulty for Taft
This specific suit against Taft, Burtin and Holocomb, was filed by two investment providers in the Orange County Superior Court of California. Amongst other claims, it alleges that Taft ran an unlicensed cannabis outfit in Sonoma County.

The lawsuit additional paints a dismal portrait of the defendants, claiming they committed frequent and ongoing “dishonest, corrupt and fraudulent activity.” It also calls Taft a “mercurial and volatile leader,” identified for bragging to workers about his massive tips. It calls into query Taft’s capacity to lead, though outlining a quantity of his deliberate fraudulent schemes, and even notes Taft’s invitations to workers to smoke weed with him for the duration of company hours.

Smoking Pot on the Job
According to the National Security Council, “workers with substance use problems miss virtually 50 % extra perform days than their peers – up to six weeks each and every year,” and not surprisingly, “absenteeism leads to losses in productivity.” The Council outlines a quantity of strategies in which employers can assist to ease this circumstance, like enacting robust firm drug policies, or treating substance abuse as a illness. Smoking pot with workers for the duration of perform hours is noticeably absent from this list.

This lawsuit also states that 420 Providers entered into a “death spiral” beneath Taft’s path, losing income and clientele at a staggering price.

Maintaining Investors in the Dark
Additional allegations inside the suit claim the defendants failed to seek input from firm investors just before rejecting a $75 million buyout provide from Acreage Holdings, a different operator inside the cannabis market, conducting activity across a quantity of states. The complaint notes that the defendants believed the firm to be worth substantially extra than the provide on the table, so they turned it down.

Possessing tired of these types of claimed company situations, the plaintiffs now seek:

  • A minimum of $11 million in damages
  • Dissolution of 420 Providers
  • A preliminary injunction against the defendants and
  • A court appointed receiver to oversee management of 420 Providers.

Implications
The accomplishment of a firm usually reflects the actions of its leaders, and if the charges outlined in this complaint are located to be right, it is not surprising that investors are searching for damages and the dissolution of partnerships.  One point that is intriguing, is the willingness of a firm leader (Taft) to partake in drug use with workers while on the clock. Not only does this type of behavior send an inconsistent message to workers on what is anticipated of them (i.e. to stay sober and in a position to operate on complete cylinders at all occasions) but it also calls into query whether or not or not Taft has his personal drug use beneath manage. And if not, is that great for company? At the finish of the day, whether or not a single is functioning in an market that revolves about drugs or not, workers should really be anticipated to conduct themselves professionally for the duration of functioning hours, and these in leadership positions have to lead by instance.

About Cannabis Law Group

The Los Angeles CANNABIS LAW Group represents growers dispensaries, ancillary providers, sufferers and these facing criminal marijuana charges. Get in touch with us at 714-937-2050.

Added Sources:
National Security Council – Drugs at Perform