Marijuana Drama; Corporate Saga Shows Immaturity of Industry
It is not as if drama does not happen in mainstream business on a regular basis, but the stories that go public tend to happen with well established businesses where competition is at its fiercest. The drama surrounding Massroots‘ ousting of Isaac Dietrich, their CEO, may have less excuses than your typical corporate saga though.
There are few businesses in the cannabis industry that can compete with the media giant Massroots. They are, relatively speaking, still a young business leading the way in a young industry. If the cannabis industry wants to be accepted throughout the country, should the industry leaders like Massroots conduct business professionally and set an example for the rest of the industry on how to take it to the next level? Instead, it seems as though Dietrich abused his authority as CEO and the lawsuits that have now been filed are putting Massroots in a bad light. The marijuana drama became particularly thick when a “separation agreement” was signed that stipulated Dietrich could not make any disparaging comments about Massroots.
In the complaint, the Denver-based company also reveals the reasons behind Dietrich’s sudden departure on Oct. 16: allegations of “serious misconduct,” including “illegal drug use at the workplace, improper sexual activities involving the workplace, and misappropriation and misuse of company funds,” according to the court filing.
Dietrich violated those claims when he was interviewed by Marijuana Business Daily for a Nov. 9 article in which he said he was considering calling a shareholder vote to oust MassRoots’ board of directors, MassRoots alleged.
“As a direct and proximate result of Dietrich’s breaches of the separation agreement, MassRoots has sustained substantial damages, including those resulting from diminution in its market value since the publication of Dietrich’s disparaging statements in violation of Sections 9 and 10 of the separation agreement,” MassRoots’ attorney wrote in the complaint.
Separately, the company claims that Dietrich paid himself and others without authorization in various amounts totaling upward of $250,000. Such payments would have needed to be approved by the board of directors, attorneys wrote in the lawsuit.
“This baseless lawsuit is meant to scare me into not filing the proxy, which the board knows they will (lose),” he said in a follow-up emailed statement. “It was filed on the same day the board approved our 10-Q (third-quarter earnings filing), which had no mention of any of these allegations.
Massroots may well survive this setback, however it has tarnished their reputation and opened the door for other media business to fill their niche. Will cannabis businesses continue to be irresponsible and fail to act professionally? When will this industry prove to the rest of the United States that it can expect consistent productive business practices?
read more at thecannabist.co
Enjoyed?
Leave your Feelback!
