Ep. 3 Smoke Screen: The Dark Ugly Underside of Corporate Cannabis

Smoke Screen Ep 3

This is a regular series of articles intended to be chapters in a compilation story book of lessons to learn from Corporate Cannabis. Names have been changed to protect the guilty (and the innocent).

Our next chapter in this ongoing saga is about investors. At this point in the cannabis industry, it doesn’t matter what kind of operation or license or CBD or hemp product you want to launch, you need investors and deep pockets to weather the purge of a storm. They say the first rule of investing is to never invest your own money, which is especially true if you don’t have the millions of dollars required to become profitable.

Typically what happens is you prepare an investment deck, business plan and projections and then solicit that pitch to every viable potential investor you can find. Every time you pitch you refine your pitch again and again. Usually by the time your potential investor is educated enough on the cannabis industry and its challenges the investor backs out and is no longer interested.

In the rare case you find someone crazy enough to take the risk, you must know who you’re dealing with. Sometimes a simple Google search will tell you everything you need to know. Other times a formal background check is warranted.

This particular story is about a deceptive investor that robs Peter to pay Paul. He invested in a property and licensed operation, and then embezzled $150,000+ from his own company and co-founders.

Now there’s a facility and licenses attached with nothing happening or being built out because this guy took all the money. Of course he tried to take the partner’s shares illegally. When you partner with people, you are marrying them financially. It is easier to get divorced than it is to get rid of a shareholder.
The story doesn’t end there. He then took a rent application for a residential property a co-founder submitted and used his identity to put in a million dollar credit line application with an extraction equipment supplier.

Only after the fact did they find multiple and horrifying complaints against this person on The remaining partners put in a background check after the fact as well and found out this person had 33 registered addresses in the last two years. They also found out he was a reserve deputy sheriff for a county just outside Los Angeles, seemingly a double agent working to get dirt and inside information on members of the cannabis industry.

The weirdest part yet is the girl he introduces as his daughter, but they talk and look at each like lovers. Even worse, there is an article about this guy and how he got caught up with thousands of firearms registered to him, allegedly procuring and selling them for cartel and gangsters.

The moral of this chapter in the Smoke Screen is: Know Your Partners. Know who they are, what they’ve done and what’s in their hearts. We’re not sure what motivates a person to want to steal and sabotage people’s lives and dreams. Perhaps once their hole is dug so deep the only way to get by is robbing Peter to Pay Paul. What we do know is that more and more it’s happening everyday in the cannabis world. The way regulations have been set up in most states requires investors. Then the corporate cannabis takeover begins. Watch yourself and watch your back as money and greed tends to change those with an impure heart.

The other thing to remember is that even though this guy committed all kinds of fraud and criminal identity theft, courts both civil and criminal are typically unwilling to allow the legal system to be used for cannabis litigation.

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