California Cannabis Growers Destroyed Own Operation, Undermined Loan, Lawsuit Claims

The agreement with Roots Properties required 90% of the firms' profits to be used to pay off the loan.

California industrial agriculture firm and investor Roots Properties has filed suit in Los Angeles Superior Court against a pair of cannabis companies that it said undermined a six-figure loan agreement through “intentional sabotage” of their own grow operation, from which 90% of the profits were supposed to go to Roots.

According to the lawsuit, Island View Ranch LLC and Island Breeze Farms LLC struck an investment deal with Roots Properties for $400,000 in loans and another $350,000 line of credit, from which it took out $262,192 of the funds, Law360 reported.

The money was intended to fund a cannabis greenhouse operation that did business as Bay X. Under the terms of the deal, Roots would get most of the profits, with only 10% going to the Island entities.

But, the suit alleged, owner James Mesa – who reportedly died prior to the lawsuit’s filing and is not a defendant – organized deliberate sabotage of the greenhouse grow.

“Systemic and intentional activities by defendants had the predictable results of destroying the entire Bay X greenhouse of plants, rendering them financially worthless,” the lawsuit alleged. “The net profits for the first year were zero dollars based upon zero pounds of commercially salable processed cannabis.”

The breach of contract lawsuit further described how Mesa and the two companies allegedly surrounded healthy plants with mold-ridden cannabis plants, disabled electrical outlets, killed off climate control systems and grow lights, disrupted air flow, and turned off water pumps, all in an effort to undermine the grow operation, Law360 reported.

John Schroyer

John Schroyer has been a reporter since 2006, initially with a focus on politics, and covered the 2012 Colorado campaign to legalize marijuana. He has written about the cannabis industry specifically since 2014, after being on hand for the first-ever legal cannabis sales on New Year’s Day that year in Denver. John has covered subsequent marijuana market launches in California and Illinois, has written about every aspect of the marijuana trade, and was part of the team that built the cannabis industry’s first-ever trade show, MJBizCon. He joined Green Market Report in 2022.

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