Apeks Supercritical Archives - Green Market Report

StaffJanuary 25, 2023
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5min3900

The Daily Hit is a recap of the top financial news stories for January 25, 2023.

On the Site

New York Approves 30 More Cannabis Retailers

The New York Cannabis Control Board nearly doubled the number of licensed retailers to date during its Wednesday meeting with the approval of 30 new licenses. That brings the statewide total of locations approved so far to 66, with more still on the way. Read more here.

Ascend Wellness Expands into Maryland with $19 Million Acquisition Deal

New York-based Ascend Wellness Holdings (CSE: AAWH.U) (OTCQX: AAWH) announced its expansion into Maryland with its $19 million purchase of Devi Holdings, which runs four operational medical marijuana dispensaries. Read more here.

Michigan Developer Files $60M Lawsuit over Medical Marijuana Permits

Rubicon Real Estate Holdings, its principal Joseph Brown, and Brown Design Consultants allege in the suit filed in Oakland County Circuit Court that the city, and its clerk Garland Doyle, dragged its feet on issuing the permit for nearly four years, causing the developer’s lender to pull its $45 million in loans and led to the loss of several tenants for the proposed development. Read more here.

Apeks Sued For Faulty Extraction Machine Costing $357,000

Apeks is being sued for selling a $357,000 extraction machine that the buyers claim didn’t live up to the sales claims. Ryan Elmore and Warren Blesofsky, owners of California-based medical cannabis business LB Atlantis LLC, bought Apeks’s new “High Production Series” machine, which was marketed as being able to process “nearly 60 pounds of raw material per day when operating for 23 hours per day with a 90% cannabinoid extraction rate.” Read more here.

MariMed Finds $35 Million in New Funds

MariMed, Inc. (CSE: MRMD) (OTCQX: MRMD) has closed on a $35 million secured credit facility, with Chicago Atlantic as the lead lender. MariMed said it has already borrowed $30 million at close and can draw down up to an additional $5 million over the next six months. Read more here.

In Other News

The Green Organic Dutchman Holdings Ltd.

The Green Organic Dutchman Holdings Ltd. (CSE: TGOD) (OTC: TGODF) plans to become BZAM Ltd. after its board of directors approved the name change. The move is still subject to regulatory approval including that of the Canadian Securities Exchange. Read more here.

Georgia medical cannabis

The state commission in charge of Georgia’s medical marijuana program adopted a rules Wednesday for the manufacture and sale of low-THC cannabis oil to patients suffering from a variety of diseases. The rules will govern various aspects of the program including the facilities that will produce the oil, the dispensaries where the oil will be sold, and the independent laboratories that will test the product. Read more here.

New York cannabis

The NY Committee on Open Government published an advisory opinion on Jan. 20, after medical marijuana patient Tim Mitchell inquired about the legality of certain Office of Cannabis Management and Dormitory Authority of the State of New York public meeting practices. Read more here.


Debra BorchardtJanuary 25, 2023
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5min2990

Apeks is being sued for selling a $357,000 extraction machine that the buyers claim didn’t live up to the sales claims.

Ryan Elmore and Warren Blesofsky, owners of California-based medical cannabis business LB Atlantis, LLC, bought Apeks’s new “High Production Series” machine, which was marketed as being able to process “nearly 60 pounds of raw material per day when operating for 23 hours per day with a 90% cannabinoid extraction rate.”

The cost of this machine was $315,000, but with shipping, the final purchase amount was $357,761.25.

LB Atlantis received the machine in October 2018, but Elmore and Blesofsky allege they had problems from the first day of operation. The lawsuit states, “Among other problems, the machine never processed more than 23 pounds per day and ‘never approached’ a 90% cannabinoid extraction rate.”

In addition to the less-than-promised processing amount, they claim the resulting oil product was consistently discolored and burnt.

Their case filing says, “Finally, in late August 2019, Elmore spoke to Andy Joseph (Apeks president), who told Elmore that Plaintiffs could return the machine for a full refund and Apeks would sell them a different machine at a lower cost. Apeks then reneged, saying that the Plaintiffs could return the machine at a reduced ‘trade-in’ or ‘depreciated’ value, and that Plaintiffs would be given only ‘store credit’ towards a new machine. Plaintiffs retained the machine.”

The pair continued to try to get the faulty machine to work. According to the case, they ordered replacement valves as suggested by Apeks, on the promise of a refund if that did not work. When the replacement valves did not work, the owners claim Apeks refused to refund the cost of the valves.

In June 2020, Elmore and Blesofsky said Apeks remotely installed software updates to the machine, which made it “even less functional.” They say they finally stopped using the machine in July 2020 and filed this lawsuit in March 2022.

The case was amended in June 2022 to include claims for fraudulent inducement/fraudulent misrepresentation, breach of an oral agreement,  and violations of the Ohio Deceptive Trade Practices Act.

Apeks moved to dismiss the claims, saying that the sales contract stipulated that any action had to be within a year and the purchase occurred in 2018. However, according to Law360, District Judge Sarah Morrison disagreed, finding that the sales contract could be nonbinding.

Law360 reported, “Plaintiffs sufficiently allege that Apeks fraudulently induced them into purchasing the machine based on conduct that occurred prior to contract formation,” Morrison’s opinion said, adding later that “if Plaintiffs are successful on their fraudulent inducement claim, the Agreement will be rescinded and the one-year limitation on actions therein is not enforceable.”

The owners had originally planned to buy two machines, costing $115,000, that could collectively process 21 pounds of raw plant material in a 19.5 hour day. However, they were convinced by Apeks to buy the newer machine. They say that the Order Form/Quote contained a warranty that “the equipment would be free from defects in materials and workmanship for three years.” If not, Apeks would repair or replace the defective part or equipment, and failing that, return the equipment and refund the purchase price.

The buyers also claim that the only research that Apeks did on the machine was extracting CBD from hemp, not THC from regular cannabis. The buyers say they made it clear to Apeks that THC extraction was their goal.

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