Would-be Whistleblowers Facing Countersuit from Former Employer

Top Shelf currently holds active distribution, delivery, and manufacturing marijuana permits in California.

A pair of former employees at a California marijuana company who tried to blow the whistle on millions of dollars worth of cannabis counterfeiting and diversion are now facing a lawsuit from their ex-boss, who denied all wrongdoing and claims instead that the two employees were thieves.

The cross-complaint, filed May 1 in Sacramento County Superior Court by Top Shelf, dba Cannazon, levies seven charges against George Engers and Garrett Webb, including fraud, misappropriation of trade secrets, breach of fiduciary duty, and more. The suit charges that the two stole an undetermined amount of money that should have been paid to the retailer’s suppliers, and seeks damages of at least $250,000.

Apart from the finger-pointing, with both sides accusing each other of serious wrongdoing, even the very work titles of Engers and Webb appear to be a matter of dispute: Engers said he was chief operating officer and Webb was general delivery manager, but the cross-complaint identifies them as a manager and dispatcher, respectively.

Top Shelf Cross Complaint

On top of that, the cross-complaint charges that Engers and Webb stole from Top Shelf, contrary to the narrative laid out in the lawsuit for wrongful termination that the pair filed last November, which alleged that the primary owner of Top Shelf, Quan Le, was diverting legal cannabis to the illicit market and counterfeiting popular marijuana products from brands such as Jeeter.

“Engers enlisted the help of Webb and together they wrongfully took – for their personal use – Top Shelf’s funds that were to be used to pay Top Shelf vendors,” the cross-complaint alleges, after outlining that Engers was the sole employee in charge of the company safe and cash with which to pay suppliers.

The suit says that the full extent of the theft isn’t yet known, because Engers took with him a heap of company records and passwords when he left, which Top Shelf says it still hasn’t recovered. So it’s unclear, the complaint alleges, how many fraudulent “transactions” took place on Engers’ watch.

“The full nature and terms of many of these transactions are still unknown to Top Shelf as a result of Cross-Defendants’ concealment of those facts and continued control over the records,” the cross-complaint reads. “Vendors/suppliers insisted (and still insist) that Engers did not pay them.”

But, the cross-complaint states, in mid-September last year, the company’s owners “learned that Top Shelf’s inventory was roughly 10% of what it should have been.”

Two days later, Engers abruptly walked off the job and took with him a trove of business records, such as customer purchase histories and human resource files, the cross-complaint alleges.

The cross-complaint – which was only filed after Green Market Report contacted Top Shelf representatives about the allegations made by Engers and Webb – also charges that the two “made false allegations” about Top Shelf counterfeiting California cannabis brands Jeeter and STIIIZY.

“Those allegations were and are absolutely false,” the cross-complaint states.

The two previously told Green Market Report that they were both forced out of Top Shelf as retaliation for reporting to state and federal authorities that company leadership was engaged in both counterfeiting and diverting legal cannabis to the illegal market. The two filed suit against Top Shelf in November last year after being fired in September.

Engers and Webb could not be reached for comment, but one of their attorneys, Corey Bennett, wrote in an email that the cross-complaint is “filled with false allegations that were concocted only after they learned that (Engers and Webb) had reported counterfeiting to the Department of Cannabis Control and filed a lawsuit for wrongful termination.”

Bennett told Green Market Report, “Since we filed this lawsuit, my phone has rung off the hook with people who have known and worked with defendants for years reaching out to offer information and assistance. We have hundreds of text messages showing … that (Engers and Webb) raised concerns about potential malfeasance, not the other way around. We look forward to presenting this evidence to a jury.”

Engers and Webb alleged that Top Shelf and its associates have diverted at least $2.1 million in legal marijuana products and counterfeited an unknown number more, and that both activities are ongoing because authorities have not acted on the evidence the two provided.

The two also alleged that the diversion was aided by executives at Jeeter and STIIIZY, a claim which both companies denied.

Top Shelf currently holds active distribution, delivery, and manufacturing marijuana permits in Sacramento, according to the California Department of Cannabis Control’s database.

Both lawsuits are still pending. A case management hearing is scheduled for Sept. 1.

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.


  • michael g mclaughlin

    June 13, 2023 at 9:55 pm

    Big win for attorney fees.


  • George

    June 14, 2023 at 2:21 pm

    It would have been appropriate for GMR to contact me for comment prior to publishing the accusations in the cross-complaint, considering that they can be easily discredited. These claims lack coherence and fail to provide any specific information to substantiate the accusations.

    Publishing defamatory statements without verifying the information is irresponsible as it causes irreparable harm. Journalists should seek direct comment from accusers and ask for corroborating evidence before providing a platform for character assassination. GMR was provided with extensive documentation to support my allegations and this addendum lacks detailed information, corroborating evidence, or even a direct comment.

    GMR is also aware that the brands involved have made false statements denying their involvement/knowledge. For instance, Jeeter was caught lying when approached for comment yet they were allowed to revise their statement to remove specific details which were incriminating to the brand.

    Journalists have a crucial responsibility to prioritize accuracy and fairness by thoroughly fact-checking and seeking balanced perspectives, including contacting relevant parties for comment, in order to uphold the principles of responsible journalism.


    • Debra Borchardt

      June 14, 2023 at 3:04 pm

      The reporter attempted to contact Mr. Engers as noted in the story and was unsuccessful. The story includes a comment from Mr. Engers lawyer disputing the countersuit. It is for the courts to decide who is telling the truth. Our role is to report on the court documents not to fact check the court documents.


      • George

        June 15, 2023 at 3:43 am

        I respectfully hold a different perspective. Journalists fulfill a vital role in reporting, employing critical thinking, fact-checking, and contextualization. They should approach court documents critically and attempt to independently verify the information they contain so you don’t compromise the public’s understanding of a given situation. In my opinion, relaying court documents without fact-checking is akin to gossip reporting.

        Why shouldn’t you take the opportunity to ask relevant questions about your own story. ie, organizational structure of Top Shelf, Harvard Ventures, and Norcal Medicine Man. Who actually owns these businesses? Why is Harvard Ventures a defunct entity, was it just a burner distro? Why would a manager have sole access to the company’s safe? Why is a dispatcher handling purchase orders? Was there a report filed when the company allegedly noticed 90% of their inventory was gone? Same goes for the funds that were allegedly stolen. The logic in the cross complaint doesn’t add up and it may not be your job to litigate this but you should avoid spreading false, malicious, and defamatory statements which aim to destroy an individual’s personal and professional life.


        • Debra Borchardt

          June 15, 2023 at 9:05 am

          Respectfully, in court cases, both sides believe they are right. It is up to a judge and jury to hear the facts of the case and render a decision. Yes, people can allege whatever they want in court cases, but that is why those allegations are rebutted by the other party. We will then report that response.


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