Denver Cannabis Packaging Firm Files for Bankruptcy
High Supply, a Denver producer of child-resistant containers for marijuana products, claiming the company’s “severe financial stress” was caused by “theft and corporate espionage by former employees.”
High Supply CEO Paul Lufkin is also suing a former co-owner and several formal employees, asserting they tried to launch another marijuana packaging firm in violation of a non-compete agreement, according to BusinessDen.com.
The case is the latest example of what is a growing trend: cannabis business partners falling out and then winding up on opposing sides in a courtroom. In July, for example, Bhang Chocolate in California lost an arbitration battle to former business partner Mentor Capital and eventually owed Mentor Capital more than $1.8 million.
According to High Supply’s Sept. 30 Chapter 11 filing, the company had accumulated $245,000 in debt. Lufkin and investors from Green Leaf Acquisitions bought High Supply from co-founder Justin Walker and Aaron Israel last year, paying $400,000 for the company, including stock, BusinessDen.com reported.
A lawyer for the defendants said High Supply’s financial troubles were the result of Lufkin’s “own poor customer service and decision-making since the sale was completed.” As for the non-compete, the attorney contends in a statement to BusinessDen that Walker is complying with the agreement and the ex-employees named in the suit are not subject to non-competes.
Original Source: MJ Biz Daily