Judge orders buyer of South Broadway pot shop to pay $2.2M

The client of a dispensary alongside South Broadway’s cannabis-centric Inexperienced Mile stretch has been ordered to pay $2.2 million to the vendor, whom it retains accusing of fraud.

A Lower Above, at 1911 S. Broadway, was bought for $8 million in 2022. The client, Colorado Holdings, has been in a dispute with the vendor, Interest Farms, for years since.

The acquisition of A Lower Above and its develop operation in Colorado Springs included a $5.8 million cost and a promissory notice for the opposite $2.2 million, to be paid off in two years. However Colorado Holdings by no means paid off the notice, prompting Interest Farms to sue for cost.

When the case went to arbitration final yr, Colorado Holdings proprietor Jordan Lipton revealed why his firm had not paid: as a result of he believed it had been defrauded. Earlier than the sale, Interest Farms co-owner Phil Gist had included figures from a second cultivation web site in profit-and-loss statements and failed to say that A Lower Above’s income was dropping, Lipton mentioned.

“We completed at $14,347,000 for the yr,” Gist texted Lipton in early 2022, a income quantity that included the develop that was to not be a part of the sale, in line with Lipton.

“That’s nice, thanks for sharing Phil,” Lipton responded. “… Spectacular numbers.”

A couple of months later, Gist texted, “Inform your board man that mentioned Colorado is lifeless that we crushed it in the present day,” in line with a replica of their textual content change that BusinessDen obtained.

“Good man that’s superior. How a lot you boys do?”

$108,740.60,” Gist responded on April 20. Lipton gushed: “That’s unreal, tremendous spectacular.”

However that quantity, despatched 4 months earlier than their sale closed, included the second cultivation web site and was an outlier, Lipton informed the arbitrator. In actuality, Gist was decreasing stock ranges forward of the sale and hiding A Lower Above’s falling gross sales numbers, Lipton alleged.

By early 2024, Lipton had not made funds on the promissory notice and was texting Gist to rearrange a gathering. The latter was irritated on the request and cost delays.

“Off the report or no matter it’s known as. Man to man and so on. What’s the motive Jordan? I don’t perceive what you want to achieved through cellphone convention,” Gist wrote.

“Between you and I, if the purpose is to get any type diminished agreed upon quantity, that won’t occur,” he added. “I might fairly get zero then (sic) take a provide lower than owed.”

In January of this yr, Choose Elizabeth Starrs sided with Gist. The arbitrator discovered that Lipton knew what he was shopping for and, after conducting in depth due diligence, knew what income the Broadway retailer and one cultivation web site in Colorado Springs generated.