Cannabis Racketeering Conspiracy In Arizona: Medical Marijuana Giant's Lawsuit Against Ex-Employees And Competitors

Trulieve Cannabis Corp. TRUL TCNNF is suing its two ex-purchasing managers and at least five other cannabis businesses in Arizona for taking part in alleged "kickback schemes" that granted them advantageous shelf space at the company's 21 marijuana outlets statewide, as reported by Green Market Report's John Schroyer.

In the civil racketeering lawsuit filed on Aug. 24 in Maricopa County Court, the Florida medical cannabis giant led by CEO Kim Rivers said that Randall Uberecken and Daniel Hirchak, its two former employees, had been involved in "commercial bribery" for three years, starting in 2020.

Come see Kim Rivers at the Benzinga Cannabis Capital Conference, the place where deals get done, this Sept 27-28 for its 17th edition.

According to Trulieve, the duo obtained nearly $1 million and established separate companies: CTWWW LLC and YDD LLC. These corporations were used as a means to channel the kickback funds.

The following five businesses, including YourWay Cannabis Brands and two of its subsidiaries, Labtronix dba Venom Extracts and YourWay Cottonwood, Nature's Wonder licensed dispensary chain and Healing Resources and Consulting Inc., a hemp company paid to the fraud-duo to reach shelf space at its retail locations, the lawsuit stipulates.

Here's What Prompted A 'Civil Conspiracy'

Additionally, the suit pointed to a "robust" competition for shelf space in the Grand Canyon State, which allegedly prompted Uberecken and Hirchak to be a part of the "civil conspiracy."

"The robust nature of Arizona's retail cannabis market, combined with the limited number of available and open retail dispensaries, has created competition among entities and individuals to have their cannabis and cannabis products placed into licensed retail dispensaries for sale," the suit said.

Both Uberecken and Hirchak were hired by Arizona-based Harvest Health & Recreation, which Trulieve acquired in October 2021 in a billion-dollar merger deal. They resigned in May of this year after rising to higher roles within Trulieve following the merger of two cannabis giants. Uberecken served as senior medicated procurement manager as of June 2022. Hirchak reported directly to Uberecken while serving as medicated procurement manager as of February 2022.

What's Next

As of now, no hearing has been scheduled in the case.

Trulieve Amid Legal Hurdles

Meanwhile, Trulieve filed a civil lawsuit against Black-owned  Harvest of Ohio and Harvest Grows in Franklin County Common Pleas Court this July, alleging that negotiations around debt payoff are "not in good faith and had no intention of repaying the almost $25 million debt."

The Benzinga Cannabis Capital Conference, the place where deals get done, 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.

Photo: Courtesy of pixel2013, lindsayfox by Pixabay