Online cannabis marketplace Eaze finds itself entangled in a legal quagmire as former owners of Green Dragon, a cannabis company operating in Colorado and Florida and acquired by Eaze in 2021, file serious allegations of fraud and misconduct.
Eaze, often compared to the "Amazon of weed," has marketed itself as a cannabis software platform and marketplace, connecting customers to vendors and providing delivery services.
About The Lawsuit
-
The lawsuit contends that Eaze intentionally deceived investors about its financial health and violated California law by "renting" multiple cannabis licenses to conduct its business.
-
Additionally, the suit accuses Eaze of fostering a hostile work environment and engaging in gender discrimination, leading to the dismissal of Green Dragon's co-founders after the merger.
-
The lawsuit also implicates Silicon Valley figures James Henry Clark and Thomas Jermoluk, alleging they have a shell company holding at least 35% of Eaze's stock and serve on the company's board without prior disclosure, reported Weed Week.
Green Dragon founders assert that Clark and Jermoluk spearheaded the merger, and a loan of $36.9 million granted them significant control over Eaze.
Moreover, the lawsuit alleges that Clark and Jermoluk misled the Green Dragon founders about Eaze's financial strength, despite Eaze's CEO, Cory Azzalino, denying any cash flow issues.
See Also: 'Glaring Double Standard': Targeting California's Legal Cannabis Industry As Black Market Booms
The suit further alleges gender discrimination and a hostile work environment experienced by the co-founders of Green Dragon after the companies merged. Despite selling Green Dragon to Eaze for a 30% ownership stake and two board seats, the three founders were terminated in February, adding to the complexity of the legal battle, reported SFGate.
The legal battle comes amidst accusations from Canadian firm Herban Industries, alleging that Eaze disguised cannabis transactions to enable credit card payments, granting the company an estimated 300% sales advantage.
Despite these challenges, Eaze maintains its stance, asserting that it operates lawfully and is in a 'healthy financial position'.
Interested to know more about cannabis regulatory compliance and transparent practices in maintaining trust and credibility in the market, consider joining us at the Benzinga Cannabis Capital Conference, the place where deals get done, which is returning to Chicago this Sept 27-28 for its 17th edition. Get your tickets today before prices increase and secure a spot at the epicenter of cannabis investment and branding.
Read Next: California Lawsuit Alleges Intentional Sabotage Of Cannabis Grow Operation: Report
Image Credits: JRByron, WilliamCho by Pixabay Edited By Benzinga
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.
The Benzinga Cannabis Capital Conference is coming to Florida
The Benzinga Cannabis Capital Conference is returning to Florida, in a new venue in Hollywood, on April 16 and 17, 2024. The two-day event at The Diplomat Beach Resort will be a chance for entrepreneurs, both large and small, to network, learn and grow. Renowned for its trendsetting abilities and influence on the future of cannabis, mark your calendars – this conference is the go-to event of the year for the cannabis world.
Get your tickets now on bzcannabis.com – Prices will increase very soon!