6 lawsuits filed against Nevada marijuana company CWNevada

Updated September 6, 2018 - 10:59 pm

CWNevada, one of the state’s largest cannabis companies, faces six separate lawsuits alleging fraud, failure to pay lenders on time and, in one case, misappropriation of intellectual property.

CWNevada owns at least two cultivation facilities, a production facility and three dispensaries under the Canopi brand. The company calls itself “the premier cannabis distributor in Nevada’’ on its Twitter page and is one of just three companies that own three dispensaries in Clark County, according to the Department of Taxation.

The company is struggling to pay back millions of dollars it raised from lenders over the past few years for cultivation, production and distribution of marijuana products, according to court documents. The lawsuits come as Nevada marijuana retail sales have exceeded state forecasts.

“While local and national media outlets report on the unprecedented success of Nevada’s regulated marijuana market, CWNevada, LLC’s management has managed to run the business into the ground,’’ alleged a lawsuit by Green Pastures Fund, Jakal Investments, Green Pastures Group, Jonathan Fenn and Growth Opportunities.

“Despite having substantial capital investment from Plaintiffs and otherwise, and the market advantage of holding privileged licenses relating to every facet of the operations, CWNevada has failed to turn a profit, has irreparably harmed its relationships with key vendors, and has now defaulted on its primary financing provided by Plaintiffs.”

That lawsuit alleged CWNevada owes the plaintiffs $15 million.

Paul Lapping, the manager for the Green Pastures Fund, and Joel Blair, the manager for Jakal Investments, did not respond to a request for comment. Managers of the other funds could not be found.

The other lawsuits were filed by Highland Partners NV LLC, which rents space to CWNevada in Las Vegas; MI-CW Holdings LLC, MI-CW Holdings NV Fund 2 LLC and Green Pastures Group LLC, which all claim to have loaned money to CWNevada; and CIMA Group LLC, which granted CWNevada an exclusive license to manufacture marijuana-infused products under the Wana brand in Nevada.

Response planned

CWNevada CEO Brian Padgett, a condemnation and eminent domain lawyer, did not return calls to his office.

Todd Bice, who is representing CWNevada, said he advised his client not to speak to the media. Bice said he will file Padgett’s response to the claims Friday.

“At that time, not only is it our intent to debunk the specious claims but to also assert counterclaims over misappropriation of company assets and opportunities,” Bice said in an email to the Review-Journal. “The story is not as currently spun and will be vastly different once responses are filed.”

All of the lawsuits with the exception of the one filed by the CIMA Group have been condensed into one case, according to court records.

MI-CW Holdings NV Fund 2 alleged that it loaned CWNevada $3.25 million for equipment and that the company has not paid it back. MI-CW Holdings NV Fund 2 accused CWNevada of “fraudulent conduct” and has asked the court to require CWNevada to provide it with “true and correct financial statements.”

“On information and belief, CWNevada intended to induce MI-CW Fund 2 to enter the Loan Documents so that CWNevada could obtain immediate funds without ever intending to repay MI-CW Fund 2 or complying with the terms of the Loan Documents.

“CWNevada’s intention to never perform under the Loan Documents is evidenced by its failure to make any payments due under the Loan Documents, including the first payment due,’’ according to a July 12 filing by MI-CW Holdings NV Fund 2.

The lawsuits filed by Green Pastures Group and MI-CW Holdings sought access to the company’s financial statements and alleged CWNevada did not repay loans.

Green Pastures Group did not disclose in its lawsuit how much it alleges CWNevada owes it. MI-CW Holdings said it agreed to a three-year loan in June 2017 for $161,802.61. CWNevada stopped making its monthly payment of $5,914.60 on the loan in January, according to the lawsuit.

Highland Partners’ lawsuit alleged the company has not paid rent or operating expenses.

“To date, CWNevada has not paid any Base Rent to Highland whatsoever, despite being in possession of the Premises for over twelve (12) months,” according to the Highland lawsuit filed July 6, 2018.

The Highland lawsuit also accused the company of fraud and alleged Padgett removed a mutually approved accountant after a $1.3 million discrepancy was discovered.

The company asked the court for access to CWNevada’s financial records and to appoint a receiver.

Motives questioned

Highland is managed by Thornapple River Capital, according to the Nevada secretary of state’s office website. Brandon Kanitz is the sole managing member of Thornapple, according to his LinkedIn page.

Kanitz also manages MI-CW Holdings LLC and MI-CW Holdings NV Fund 2 LLC, according to filings. He did not respond to a request for comment.

CWNevada said in court documents that it is reluctant to produce the financial records because it fears the lenders might have ulterior motives.

“The defendants believe that the Plaintiffs wish to obtain access to CW’s books and records so that they may obtain a competitive advantage to their respective business operations there and in direct competition with CW’s efforts to enter into the Michigan market,” said Amy Sudgen, an attorney in Padgett’s office, in court documents.

Kanitz resides in Michigan, according to his LinkedIn page.

CWNevada has licensing agreements to produce 13 brands of marijuana-infused products, including Charlotte’s Web, Wana Brands, Medamints and The Mad Hatter Coffee &Tea Co., according to the company’s Twitter page.

Bice declined to say whether CWNevada still has the 13 license agreements.

CIMA Group, which holds the intellectual property for Wana Brands, alleged in its lawsuit that CWNevada is using Wana Brands recipes and processes to make and sell a competing product called Scarlet Oilworks gummies. Cima alleged Nevada sales of Wana gummies began to plummet in August 2017.

CIMA “is informed and believes that CWNevada and/or the CWNevada Affiliate(s) have intentionally obscured the similarity between the WANA Gummies and the Scarlet Oilworks D.I.M.E.S. Gummies by not accurately listing the ingredients on the packaging for the Scarlet Oilworks D.I.M.E.S. Gummies,” according to the suit filed on April 20, 2018.

The suit also claims that CWNevada owes CIMA almost $290,000 through March, 2018. Shawna McGregor, a spokeswoman for Wana Brands, declined to comment.

Contact Todd Prince at 702-383-0386 or tprince@reviewjournal.com. Follow @toddprincetv on Twitter.

ad-high_impact_4
News
NSPCA Gets Kittens From LA
Man killed during road-rage incident
Las Vegas police are looking for two men involved in the shooting death of a man outside a 7-Eleven story at Bonanza Road and Maryland Parkway on Nov. 12, 2018. (Las Vegas Metropolitan Police Department)
VA Southern Nevada Healthcare System hosts Veterans Day Car Show and BBQ
The 4th Annual Veterans Day Car Show and BBQ is held in celebration of Veterans Day at the VA Southern Nevada Healthcare System Medical Center in North Las Vegas, Saturday, Nov. 10, 2018. (Caroline Brehman/Las Vegas Review-Journal)
Wildfires in Southern California
Wildfires hit Ventura County, Calif., on Nov. 9, 2018. (Richard Brian/Las Vegas Review-Journal)
Dedication of Nevada's Battle Born memorial
The state of Nevada on Friday dedicated its Battle Born memorial honoring 895 state residents who have died in America’s wars.
Las Vegas police and Sunrise Children's Hospital hope to prevent infant deaths
The Metropolitan Police Department and Sunrise Children's Hospital held a press conference to get the message out on preventable infant deaths attributed to "co-sleeping" and other unsafe sleeping habits. (K.M. Cannon/Las Vegas Review-Journal)
No serious injuries after car hits tree in south Las Vegas
One person reported minor injuries but wasn’t hospitalized after a Wednesday morning crash in the south valley.
Nellis Air Force Base keeps airmen fed
Nellis Air Force Bass airmen have delicious and healthy food items, and a variety of dining facilities to choose from. (K.M. Cannon/Las Vegas Review-Journal)
Suspicious package found at central Las Vegas post office
Las Vegas police determined that a suspicious package found Monday morning at a central valley post office was not a threat.
Suspicious package found at central Las Vegas post office
Police evacuated the area around the Garside Station post office early Monday morning near Oakey and Decatur boulevards.
With husband's passing, family in limbo for workers' comp claim
Meredith Tracy's husand, Russell Tracy, died more than a year ago on his first day working for a new company when he fell 22 feet into a manhole that was not properly safeguarded. His employer was fined $82,000 in penalties for unsafe practices, but the company has denied her workers' compensation claim, leaving her with no compensation since the death. Rachel Aston Las Vegas Review-Journal @rookie__rae
With husband's passing, family in limbo for workers' comp claim
Meredith Tracy's husand, Russell Tracy, died more than a year ago on his first day working for a new company when he fell 22 feet into a manhole that was not properly safeguarded. His employer was fined $82,000 in penalties for unsafe practices, but the company has denied her workers' compensation claim, leaving her with no compensation since the death. Rachel Aston Las Vegas Review-Journal @rookie__rae
Las Vegas family shares flu warning
Carlo and Brenda Occhipinti lost their son, Carlo Jr., or “Junior,” to the flu last year.
Author Randall Cannon shares an anecdote about Stadust Raceway
Author Randall Cannon shares an anecdote about Dan Blocker, who played Hoss Cartwright on the TV show "Bonanza," and the actor's passion for auto racing at Stardust International Raceway in Las Vegas during the 1960s. (Ron Kantowski/Las Vegas Review-Journal.)
Project Neon 85 percent complete
On Wednesday morning Oct. 31, Interstate 15 northbound lane restrictions were removed opening up Exit 41 to Charleston Blvd. On Thursday Nov. 1, Interstate 15 southbound lane restrictions were removed. The new southbound off-ramp to Sahara Ave. and Highland Dr. also opened Thursday, November 1. With Project Neon 85% finished the flow of traffic on Interstate 15 has substantially diminished. (Michael Quine/Las Vegas Review-Journal)
Girl killed after jumping from bridge onto 215 Beltway in Henderson
Eastbound lanes of the 215 Beltway are shut down by the Nevada Highway Patrol after a female juvenile jumped from the 215 overpass at Stephanie and was struck by a FedEx tractor trailer. Michael Quine/Las Vegas Review-Journal @Vegas88s
Kristallnacht story
An interview with 94-year-old Holocaust survivor Alexander Kuechel who survived seven concentration camps and didn’t leave Germany until after World War II was over. (Mia Sims/Las Vegas Review-Journal)
1 dead in central Las Vegas crash
An early Wednesday morning crash left at least one person dead and another injured. The crash was reported just around 3 a.m. at the intersection of Flamingo Road and Swenson Street. At least two vehicles were involved in the crash, one of which caught fire. Debris was scattered across the intersection as police combed the area as they investigated the scene. Flamingo is blocked in both directions between Swenson and Cambridge Street. Northbound Swenson is blocked at the intersection.
Richard Knoeppel named the 2018 Nevada Teacher of the Year
Richard Knoeppel, an architecture design instructor at the Advanced technologies Academy, named the 2018 Nevada Teacher of the Year on Monday, Oct. 29, 2018. (Bizuayehu Tesfaye/Las Vegas Review-Journal) @bizutesfaye
Mojave Poppy Bees
(Zach Portman/University of Minnesota Department of Entomology) Male Mojave poppy bees exhibit territorial fighting behavior. The Center for Biological Diversity wants the bee, found only in Clark County, to be added to the endangered species list.
Clark County Schools announce random searches
Clark County School District middle and high school students will be subject to random searches for weapons under a new initiative to combat the wave of guns found on campus. (Amelia Pak-Harvey/Las Vegas Review-Journal)
Ron Jeremy and Heidi Fleiss React to Dennis Hof's Death
Ron Jeremy and Heidi Fleiss speak about their friend and prominent brothel owner Dennis Hof's death at Dennis Hof's Love Ranch. (Benjamin Hager/Las Vegas Review-Journal)
Nevada brothel owner Dennis Hof has died
Nevada brothel owner and Republican candidate for Nevada State Assembly District 36, Dennis Hof has died. He was 72. Nye County Sherriff's office confirmed. Hof owned Love Ranch brothel, located in Crystal, Nevada.
Las Vegas police investigate suspicious package at shopping center
Las Vegas police evacuated a southeast valley shopping center at Flamingo and Sandhill roads early Tuesday morning while they investigated reports of a suspicious package. (Max Michor/Las Vegas Review-Journal)
The Las Vegas Metro hosts the K-9 Trials
The Las Vegas Metro K-9 Trials returns to the Orleans Arena to benefit the Friends For Las Vegas Police K-9 group.
Kingman residents love their little town
Residents of Kingman, Ariz. talk about how they ended up living in the Route 66 town, and what they love about their quiet community. (K.M. Cannon/Las Vegas Review-Journal)
Service at Southern Nevada Veterans Memorial Cemetery
Twelve unclaimed veterans are honored at Southern Nevada Veterans Memorial Cemetery in Boulder City in Oct. 9, 2018. (Briana Erickson/Las Vegas Review-Journal)
Las Vegas house prices reach highest level in 11 years
Las Vegas house prices are rising But so is the amount of available homes on the market Still, properties priced below $300,000 are selling fast And September was the first time since June 2007 that the median house price reached the $300,000 mark Las Vegas home prices have been rising at one of the fastest rates in the country over the past year Recent data show the market is now less affordable than the national average
National Night Out
About 100 Summerlin residents gathered at Park Centre Dr. in Summerlin on Tuesday for National Night Out. Lt. Joshua Bitsko with Las Vegas Metro, played with 3-year-old David who was dressed as a police officer. Face painting, fire truck tours and more kept kids busy as parents roamed behind them. (Mia Sims/Las Vegas Review-Journal)
Rural homeless issue comes to a head in Pahrump
On Sept. 12, Pahrump sheriff deputies told residents of a homeless encampment on private property that they had 15 minutes to vacate and grab their belongings. That decision might face some legal consequences. (Rachel Aston/Las Vegas Review-Journal)
Business
Mecum Car Auction in Las Vegas
The Mecum Auctions is held at the Las Vegas Convention Center. Bizuayehu Tesfaye/ Las Vegas Review-Journal @bizutesfaye
Construction underway for new Google Data Center
Henderson is slated to be home to a new Google data center in December 2020. The Governor’s Office of Economic Development approved $25.2 million in tax abatements for Design LLC, a wholly-owned subsidiary of Google. The company plans to build the data center on 64 acres of land on Warm Springs Road west of Boulder Highway.
Anthony Rufo talks about his new product, an in-home digital companion and monitor.
Anthony Rufo talks about his new product, HAPPIE Home technology, an in-home digital companion and monitor designed for unpaid family caregivers that gives personalized alerts, messages and reminders. Bizuayehu Tesfaye/Las Vegas Review-Journal @bizutesfaye
Holiday parades help bring shoppers to Downtown Summerlin
Sports Town USA floor manager Angela Gardonio talks about the work that goes into the Downtown Summerlin holiday parades and how they benefit her and other businesses there.
Final vote on CG Technology
Final commission vote on the $2 million settlement for CG Technology.
Happie Home Startup Establishing Headquarters In Las Vegas
Digital companion startup company Happie Home is establishing its headquarters in Las Vegas after receiving tax abatements from the Governor's Office of Economic Development on Nov. 15. (Bailey Schulz/Las Vegas Review-Journal)
A Facebook-branded space inside of Macy’s at the Fashion Show shopping center
A Facebook-branded space inside of Macy’s at the Fashion Show shopping center will showcase 13 small businesses in November and December and seven in January. Bizuayehu Tesfaye/Las Vegas Review-Journal @bizutesfaye
T-Mobile uses ticketing data to plan for event
T-Mobile Executive Director of Arena Operations explains how ticket sales data and demographics help plan staffing, vendors, parking and operations for an event.
Costco opens its doors in southwest Henderson
Costco has opened its fifth Las Vegas-area location near the intersection of St. Rose Parkway and Amigo Street. (K.M. Cannon/Las Vegas Review-Journal)
Las Vegas strip mall and office park
The Krausz Cos. and WG Group bought a strip mall and an office park in Las Vegas for nearly $80 million total. They acquired a portion of Tropicana Beltway Center in the southwest valley for $59 million. They also acquired the Westbay office complex in the Las Vegas Medical District. The buyers are former owners of The Gramercy, a once-mothballed mixed-use project in the Las Vegas suburbs. They sold The Gramercy in phases for more than $100 million.
Mario Barth talks about the growth of the tattoo industry
Celebrity tattoo artist and business owner Mario Barth talks about the growth of the tattoo industry at The World of Tattoo industry trade show at Planet Hollywood in Las Vegas
$7.5M Las Vegas pot dispensary opens near Las Vegas Strip
Planet 13, which bills itself as one of the largest dispensaries in the world, opened to the public Thursday. It has entertainment including an interactive floor and floating orbs. (K.M. Cannon/Las Vegas Review-Journal)
Caesars CEO to step down next year
Caesars Entertainment Corp. CEO Mark Frissora will leave the casino company in February. Frissora has been CEO since July 2015. He was named CEO right after Caesars' operating company filed for Chapter 11 bankruptcy protection Caesars Entertainment emerged from bankruptcy protection in October 2017 Before Caesars, Frissora spent seven years as chairman and CEO of Naples, Fla.,-based Hertz He led the consolidation of the rental-car industry through Hertz‘s acquisition of the Dollar Thrifty Automotive Group.
Planet 13 in Las Vegas adds twist to marijuana dispensary look
Planet 13, which bills itself as one of the largest dispensaries in the world, opened to the public Thursday. The dispensary is located near the intersection of Desert Inn Road and Sammy Davis Jr. Drive, near Trump International, in Las Vegas. Planet 13 has plans in the future for a coffee shop, a tasting room for marijuana-infused beer and wine, a lounge for consuming marijuana on site if that is legalized and space for food.
Caesars Entertainment opening 2 resorts in Dubai
Cove Beach will open on Meraas’ Bluewaters Island in Dubai in November and Caesars Palace Bluewaters Dubai and The Residences at Caesars Palace Bluewaters Dubai will open in December. (Caesars Entertainment)
Bellagio, MGM Resorts International’s luxury hotel turns 20
The more than 3,000-room Bellagio hotel is situated on the site of the former Dunes Hotel. The Dunes was imploded in 1993, and construction of the Bellagio started in 1996. It cost $1.6 billion to build, making it the most expensive hotel in the world at the time. The Bellagio was former Wynn Resorts Ltd. Chairman and CEO Steve Wynn’s second major casino on the Strip after The Mirage. MGM Resorts International acquired the property from Steve Wynn in 2000. (Tara Mack/Las Vegas Review-Journal)
Facial recognition software at G2E – Todd Prince
Shing Tao, CEO of Las Vegas-based Remark Holdings, talks about his facial recognition product. (Todd Prince/Las Vegas Review-Journal)
Former NBA player, Shaquille O'Neal, speaks about his new Las Vegas chicken restaurant
Former NBA player, Shaquille O'Neal, speaks about his new Las Vegas chicken restaurant. Bizuayehu Tesfaye/Las Vegas Review-Journal @bizutesfaye
Bobby Baldwin to leave MGM
MGM Resorts International executive and professional poker player Bobby Baldwin is set to leave MGM.
Caesars has new armed emergency response teams
Caesars Entertainment Corp. has created armed emergency response teams. They are composed of former military and law enforcement officials. "These teams provide valuable additional security capabilities,” Caesars spokeswoman Jennifer Forkish said. Caesars is hiring Security Saturation Team supervisors, managers and officers, according to LinkedIn. The company did not say how many people it plans to hire for the units. (Las Vegas Review-Journal)
Las Vegas, airlines prepare for CES
CES in January is expected to attract more than 180,000 attendees. (Las Vegas Review-Journal)
AGS partners with Vegas Golden Knights
AGS is the nation’s second-largest manufacturer of Class II slot machines used primarily in tribal jurisdictions. It announced a marketing partnership with the Vegas Golden Knights NHL team. (Las Vegas Review-Journal)
Lehman Brothers bet big on Las Vegas
Lehman Brothers collapsed 10 years ago, helping send the country into the Great Recession.
Fremont9 opens downtown
Fremont9 apartment complex has opened in downtown Las Vegas. (Marcus Villagran/Las Vegas Review-Journal) @marcusvillagran
Ross & Snow launches in Las Vegas
Luxury shoe brand Ross & Snow has opened in Las Vegas, featuring "functional luxury" with premium shearling footwear. (Bailey Schulz/Las Vegas Review-Journal)
Remote Identification and Drones
DJI vice president of policy and public affairs discusses using remote identification on drones. (Bailey Schulz/Las Vegas Review-Journal)
Drones and public safety in Nevada
Two representatives in the drone industry discuss UAV's impact on public safety. (Bailey Schulz/Las Vegas Review-Journal)
Frontier Airlines to launch flights from Las Vegas to Mexico
Frontier, a Denver-based ultra-low-cost carrier, will become the first airline in more than a decade to offer international service to Canada and Mexico from Las Vegas when flights to Cancun and Los Cabos begin Dec. 15. (Rick Velotta/Las Vegas Review-Journal)
MGM Resorts International CEO Jim Murren addresses Oct. 1 lawsuits
MGM Resorts International Chairman and CEO Jim Murren addresses criticism his company has received for filing a lawsuit against the survivors of the Oct. 1 shooting. (K.M. Cannon/Las Vegas Review-Journal)
MGM Resorts International opens the doors on MGM Springfield
Massachusetts’ first hotel-casino opens in downtown Springfield. The $960 million MGM Springfield has 252 rooms and 125,000-square-feet of casino. (K.M. Cannon/Las Vegas Review-Journal)
TOP NEWS
News Headlines
ad-infeed_1
ads_infeed_2
Local Spotlight
Add Event
Home Front Page Footer Listing
Circular
You May Like

You May Like