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The current owners of the country's first publicly traded medical marijuana business utilized fraud and deception to gain control of the company, a pair of former boardmembers claim in a lawsuit filed last week.

According to a Courthouse News Service report, William Martin and David Tobias say they were approached in May 2010 by Michael Llamas, president of the Hemp Deposit and Distribution Corp., doing business as CannaBank.

Llamas wanted to present an unsolicited offer to acquire control of the San Diego–based company. His offer: ten debt-free properties, along with "various patents, technology, intellectual property, and products," in exchange for 260 million Medical Marijuana, Inc., shares, a controlling interest. Martin and Tobias were also to receive 30 million shares each out of the deal, which they agreed to in 2011.

Once the deal was struck, problems began to arise, according to the suit. The "debt-free" properties were actually tied up in "a storm of litigation," and none of the combined 60 million shares promised to the boardmembers ever materialized.

The company, which has had hands in operations including condensing cannabis into extract for pills and distributing pot-laced candy and sodas, trades as a penny stock under the symbol MJNA. Pricing as of May 6 hovered around 8 cents a share, near the stock's 52-week low. Still, that would value the missing 60 million shares at around $4.8 million.

Martin and Tobias are asking a judge to unwind the agreement with Llamas and CannaBank, award monetary judgment of damages plus interest, and order the transfer of the promised 60 million shares.

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Comments

Jason4477 June 30, 2015 @ 6:42 a.m.

You could not be more inaccurate. Michael Llamas has been running MJNA for the last 4 years. Yes, he has had his name removed but he has been running the company out of the office on Prospect in La Jolla, he has shared an office with Stuart Titus for that time period, who is the CEO (if you believe their public statements). The entire company is a fraud, do not invest in this place, look at the stock prices. Llamas is a shady as they come, real estate fraud, an addiction to prostitutes, and a manipulative scam artist to his employees. The employees are rarely paid on time, and that is when the checks don't bounce. Always great to have a boss that is facing multiple counts of fraud and mortgage fraud.

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megalo99 July 14, 2015 @ 7:34 a.m.

OK, "Jason", my name is Josh Bare and I am a former employee of GH. Seeing your post, I am now quite confident you have worked there too.

That said, I have a Superior Court case coming up against them for exactly what you stated here - they simply stopped talking to me or paying me one day. I am now owed just over $15,000.

And like you stated about late payments, my August check was paid on September 23rd and I was lucky to get that one. Now my 1099 from them reports $9000 more than it should, so naturally they've been reported to the IRS.

I am going to subpoena Mike Llamas, Troy Nihart, Linh Nguyen, Stuart Titus, Erai Beckman, Brian Coleman, Brent Alben, Chris Husong, and everyone else who was there while I was. There will be my lawyer, reporters, and we're going to ask some very fun questions.

So that said "Jason", if you can add to this circus, please contact me on Facebook.

And if any reporters want in on this, let me know.

I will not be bullied or threatened. Ever.

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