The battle to win marijuana grow licenses in states like Nevada have resulted in some very aggressive legal challenges. One such example in Las Vegas highlights the advantages of having cannabis D&O Liability Insurance coverage.
Michael and Robert Frey are joint owners with Verano Holdings of a 50,000 acre cannabis cultivation and processing facility in Nevada called Naturex which runs the Zen Leaf dispensaries in Las Vegas. Verano Holdings is one of the largest cannabis companies in the country with marijuana grow licenses in multiple states.
According to case filing, the Frey brothers are saying that they completed paperwork for additional grow licenses in Nevada and gave it to Verano to submit. Verano is accused of using the paperwork completed by the Frey brothers as a reference to then completing separate paperwork which they filed with Nevada to get their own licenses independent of the Frey brothers.
Verano CEO George Archos said the company is aware of the complaint but has not had an opportunity to review the claims.
“Based on what we know of the allegations, however, we do not believe the complaint has merit,” Archos said in a statement to the Las Vegas Review-Journal. “We intend to defend aggressively against these claims.”
“Defendants claimed the applications would be incomplete without locations specified in the application materials — albeit an incorrect analysis and unsubstantiated excuse proffered by Defendants — to which plaintiffs reasonably relied on such misrepresentation at the time,’’ the lawsuit states.
Verano “intentionally and maliciously usurped the opportunity available and belonging to Naturex and instead utilized the Naturex materials for its own entity defendant Lone Mountain to apply without including plaintiffs and without informing plaintiffs of defendants’ intended course of action,” the lawsuit states.
The actions of officers and directors of any company can lead to lawsuits that D&O Liability insurance is intended to protect a company from. Marijuana legalization is spreading fast and investors are clamoring to get a foot hold so they can prosper from the quickly growing industry. Finding the right sort of liability coverage in the cannabis can be tough though, so get in touch with David Rahn or Eric Rahn of S2S Insurance, your cannabis insurance specialists, to find out your alternatives.