Florida-based Trulieve Cannabis Corp. (CSE: TRUL) has taken legal action against two former purchasing managers in Arizona, as well as five other Arizona cannabis businesses including YourWay Cannabis (CSE: YOUR), by filing a civil racketeering lawsuit. The suit alleges that these entities were involved in “kickback schemes” that granted them coveted shelf space at Trulieve’s 21 Arizona marijuana stores.
The lawsuit, filed on August 24th in Maricopa County Court, claims that the two former employees, Randall Uberecken and Daniel Hirchak, initiated a “commercial bribery” plot as far back as three years ago. Allegedly, they received nearly $1 million in kickbacks and established their own individual corporations, CTWWW LLC and YDD LLC, to funnel the illicit funds.
Trulieve asserts that each of the named companies in the lawsuit paid Uberecken and Hirchak in exchange for securing shelf space at Trulieve’s dispensaries. Additionally, the company suspects that there may be even more brands involved in this “civil conspiracy.”
The lawsuit points to the intense competition for limited shelf space in Arizona’s legal marijuana stores, numbering just 169. Trulieve, now the largest retail cannabis company in Arizona following its acquisition of Harvest Health & Recreation in 2021, found Uberecken and Hirchak at the helm of their newly acquired dispensaries, thus giving them the opportunity to execute their alleged scheme.
Uberecken and Hirchak were in key positions to execute their plan, as they had control over which cannabis products the company purchased for resale in its Arizona retail dispensaries. Their alleged method involved charging Trulieve more than the actual price of wholesale cannabis goods, with the excess funds funneled to them.
Other companies, such as Nature’s Wonder and Healing Resources, were accused of paying Uberecken and Hirchak for “consulting services” that they never actually provided, totaling at least $250,000.
The lawsuit reveals that Hirchak eventually confessed to the schemes, corroborating many of the allegations. The situation came to light when former YourWay Cannabis CEO Jacob Cohen informed Trulieve about the kickbacks.
The lawsuit implicates all parties in civil racketeering, fraud, negligent misrepresentation, civil conspiracy, aiding and abetting, and consumer fraud against YourWay Cannabis and its affiliates, Nature’s Wonder and Healing Resources. Uberecken and Hirchak face charges of unjust enrichment and breach of fiduciary duty.
YourWay Cannabis has acknowledged the complaint and denied the allegations in an announcement released on Friday.
“While the Company has not yet filed a response to the complaint, the Company’s current management team is working to investigate the claims as the alleged misconduct occurred prior to the tenure of the current management team,” the company wrote. “YourWay does not currently make any payments of the type alleged in the complaint.”
Information for this story was found via the sources and companies mentioned. The author has no securities or affiliations related to the organizations discussed. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
