The disgruntled investor lawsuit against Parallel cannabis initially hit the public records as a heavily redacted document. The Judge in the case apparently denied the redaction request and Green Market Report got a look at the complaint in all its glory or gory detail.
Notably, the actual debt amounts are spelled out along with other details that weren’t gleaned from the previous review. There are several issues alleged in this lawsuit and it is broken down as such:
- The SAFE (Simple Agreement for Future Equity) Investors claim their $25 million investment wasn’t supposed to be released until $50 million was raised. Their money was inappropriately taken from escrow
- Former CEO Beau Wrigley increased the company debt to $300 million
- Parallel reduced its revenue projections by 40% in a matter of months
- Parallel was in default on its debts but did not tell potential investors.
- The defaults were triggered by money owed to the former founder Jake Bergmann
- Green House debt was created inappropriately to pay Bergmann
- Wrigley was conflicted between issuing debt and making sure repayment terms were overly generous
- Investors allege that the Ceres SPAC Investment may have been a ruse all along to convince the SAFE investors to commit
SAFE Investors
The SAFE investors say they agreed to invest $25 million if another $25 million was raised bringing the total to $50 million. They say they wanted Wrigley to put up some money to have “skin in the game.” They say their money…
