SF Gate reports
A new lawsuit accuses Eaze, a major California cannabis company based in San Francisco, of running an illegal operation and defrauding investors. The lawsuit also accuses Eaze of being so low on cash that it is now “pending insolvency.”
Eaze was formerly the buzziest cannabis company in California, running a delivery service that was valued at $700 million, with more than $255 million in total investment capital raised with the promise of becoming “the Amazon of weed,” according to TechCrunch. However, cash flow problems at the company have been documented for years, and Eaze has faced a series of legal problems, including its former CEO’s pleading guilty to a $100 million bank fraud scheme.
Last week’s lawsuit, first reported by WeedWeek, was filed by the founders of Green Dragon, a multistate cannabis company that merged with Eaze in late 2021. The Green Dragon founders accuse Eaze’s board of directors of “intentional and malicious” concealment of the delivery company’s financial condition in order to finalize the company merger.
The lawsuit also accuses Eaze of running a scheme that entails “renting” space from cannabis license holders instead of simply delivering cannabis products, which the plaintiffs say is a violation of California law.
Cory Azzalino, the CEO of Eaze and a named defendant in the lawsuit, said in an email to SFGATE that Eaze is “in a healthy financial position” and that the company’s operations are not in violation of California law.
Source:
https://www.sfgate.com/cannabis/article/legendary-tech-billionaire-accused-fraud-pot-18263096.php
