One of the largest multistate cannabis operators has filed a lawsuit against former employees, specifically setting sights on its Arizona locations and alleging that its workers—10 total defendants named in the case—launched a “commercial bribery scheme.”
Florida-based Trulieve filed a civil racketeering lawsuit on Aug. 24 in Maricopa County Superior Court, alleging that former Arizona employees and vendors led “kickback schemes,” giving brands access to shelf space throughout the operator’s 21 dispensaries in the state. Green Market Report first obtained the complaint and reported the lawsuit.
Randal Uberecken and Daniel Hirchak, two of Trulieve’s former purchasing managers, were named in the suit, along with five other cannabis brands: YourWay Cannabis Brands and two of its subsidiaries, Labtronix, which does business as Venom Extracts, and YourWay Cottonwood; licensed dispensary chain Nature’s Wonder; and hemp business Healing Resources and Consulting Inc.
According to the suit, the plot began as long as three years ago. Trulieve alleges that Uberecken and Hirchak received nearly $1 million and formed their own individual corporations, CTWWW LLC and YDD LLC, to route the kickback funds through. Trulieve also said that the sum could be even higher and that the “civil conspiracy” may have included more brands than those named; the brands in the suit were just those Trulieve was aware of.
In addition to civil racketeering, the complaint accuses the defendants of fraud, negligent misrepresentation, civil conspiracy, and aiding and abetting. It accuses Uberecken and Hirchak of unjust enrichment and breach of fiduciary, and the suit also includes allegations of consumer fraud against YourWay Cannabis and its subsidiaries, Nature’s Wonder, and Healing Resources.
The complaint notes the “robust” competition for shelf space in Arizona’s few legal cannabis stores. This, “combined with the limited number of available and open retail dispensaries, has created competition among entities and individuals to have their cannabis and cannabis products placed into licensed retail dispensaries for sale,” the suit states.
The suit claims that this market dynamic, namely the desire for brands to obtain that limited and precious shelf space, made Uberecken and Hirchak realize they had the power to dictate what actually went onto shelves. It further states that this was further compounded given that Trulieve is now the “largest single retail cannabis company in Arizona,” as it purchased Arizona-based Harvest Health & Recreation in 2021.
Consequently, the acquisition included all of the Harvest Arizona dispensaries along with Uberecken and Hirchak, who were previously Harvest employees.
Uberecken was hired in 2018 and, as of June 2022, became the senior medicated procurement manager under Trulieve’s ownership before resigning on May 24 of this year, according to the lawsuit. Hirchak started as an assistant buyer at Harvest in 2019 and became medicated procurement manager in February 2022. Hirchak reported directly to Uberecken and was terminated on May 30 of this year.
“Uberecken and Hirchak had the means, methods, and opportunities to carry out this plan because they controlled and decided which cannabis products plaintiffs purchased from third-parties on a wholesale basis for sale in Harvest’s/Trulieve’s Arizona retail dispensaries,” the lawsuit states.
The lawsuit alleges that the pair had YourWay Cannabis and its brands charge Trulieve slightly more than the true price of wholesale cannabis goods, taking home the difference as a payout—more than $500,000 over time, the suit states.
Additionally, Nature’s Wonder and Healing Resources paid Uberecken and Hircak’s LLCs for “consulting services” that were allegedly never provided. THe monthly payments totaled at least $250,000, the suit claims.
The suit states that Hirchak eventually confessed, confirming many of the claims, including that “he and Uberecken also received monthly kickback payments for illegitimate ‘consulting’ services from other third-parties.” The suit notes that the only reason the situation was revealed was because former YourWay Cannabis CEO Jacob Cohen approached Trulieve in Fall 2022 about a potential job and told the company about the kickbacks.
According to the country court, a hearing has yet to be scheduled.
