Folium Biosciences: Last Minute Raise Saves Overvalued Company From Collapse…Top Execs Lose Their Sports Cars To The Bank

CBD wholesaler, Folium Biosciences, was on the brink of collapse in mid-February and although a quick raise has kept the wolf from the door many questions lie ahead for investors.

Its former CEO Kashif Shan and current CEO Quan Nguyen were being personally sued by their Colorado Springs lender 5Star Bank who was winning a legal battle to have their luxury sports cars repossessed and a receiver appointed over some of Folium’s bank accounts, according to a court filing in the district of El Paso County for Colorado state court.


Kashif Shan


But Nguyen made a desperate pitch to private investors in Folium Bioscience and quickly raised around $700,000 to cover short-term expenses and debt, according to internal emails reviewed by Cannabis Law Report.


Quan Nguyen


Part of Nguyen’s pitch was that by April a large investor would come in to buy Kashif Shan’s majority equity stake for double-digit millions of dollars.


Folium CEO Nguyen wrote in an email on February 10th at 7:30 pm:


What Quan Nguyen failed to disclose to investors in his capital raise calls was the fact that Folium/Shan/Nguyen had just signed a court order agreeing to pay back 5star Bank $100,000 due in two $50k payments in March and since it appears 5star didn’t trust them a third party receiver would come into Folium to make sure they got their collateral.




This included both the Porsche and Lamborghini  that had to be turned over to David Brockway at 5star Bank by 2pm on February 15th. Since the Porsche was driven by Shan’s wife, Maryum, she also had to sign the court order.


“All in all, just feels like a last ditch effort to extract cash from investors”, said a Folium investor about the recent capital raise who says they have given up on any chance of recovery of their investment and didn’t patriciate in the recent raise.



5star Bank also issued Folium one of its $2 million PPP loans, which government records show Folium says was used to retain around 200 employees during Covid-19 lockdowns.

Multiple former and current employees at the time reached out to Cannabis Law Report to say Folium didn’t retain or have anywhere near that amount of full-time employees on the books and had moved staff to contractors.

The company did not respond to a request for comment about the PPP loan.



Folium says it is working to move all operations to Pueblo West, from Colorado Springs, where a new extraction plant was finished last year. According to insiders, the buildout took a few years to complete because of cash flow issues. Some of the extraction technology Folium will be using is not the most up to date and industry best,  according to an investor who had reviewed the site.


In 2021 a former salesman, Brandon Young,  took Folium and its founders to court. in a multi-day trial.

Young was awarded backpay of sales commissions and interest valued at around $206k. He lost his fight for sweat equity promised by Shan and Nguyen of .5% but his lawyers at Denver-based Fortis Law have appealed the decision because they think the judge errored in his interpretation of how the contract was or wasn’t made legal.

Attorney David Olsky of Fortis Law told Cannabis Law Report they would not comment on the litigation. Olsky has represented at least two other Folium execs who sued for similar issues with promised equity never being delivered. According to people familiar with the cases Folium finally agreed to settle and paid the former execs a percentage of what was owed.


David Olsky of Fortis Law


Young, who worked from Southern California to bring in multi-million dollar clients, could be awarded over $2 million if the Colorado State Appellate court agrees he is entitled to the equity interest. According to court to documents, the parties had stipulated that the value of Folium at the time of Young’s termination was $550,938,000; the value of the lost 0.5% equity was thus stipulated as $2,754,690.

A court order in favor of Young could likely attach any future money coming in that the company is desperately trying to raise for basic operations and to cover their debt with New Jersey based private equity fund GEM Capital. GEM Private Equity Fund II filled a secured UCC lien in January 2022 on all of Folium’s assets which includes accounts receivable.

In 2018, Kashif told investors they valued Folium at around $500 million and he thought he could get it sold for much more. An internal cap table reviewed by Cannabis Law Report shows at one time Shan owned over 34% of the company but insiders say it’s likely less than that now, because he had sold equity back to the company in return for new investors over the years.

As of the last few months, in Folium’s pitch for Kashif Shan’s majority equity, the company is saying they are now valued at around $250 million, according to an investor. But even that amount appears to be a pipe dream valuation according to people familiar with  company revenue and assets.


Editor’s Note

This reporter was sued by Folium in 2019 for reporting on issues of corporate malfeasance, work safety violations and forged Certificate of Analysis reports.

In October 2021 after Folium settled a lawsuit and paid off a former executive that CLR reported on the company dropped its litigation against this reporter. All of our reporting here has remained unchanged and survived any type of litigation challenge. 


Brandon Young Appeal

21.09.08 Young Opening Brief (Final)


Court Documents Stipulating Surrender Of Vehicles The The Bank

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