Key Takeaways
- A Miami-based hemp company, LGNDS, has joined Mike Tyson and Ric Flair in a lawsuit against four cannabis executives, alleging conspiracy, wire fraud, embezzlement, and money laundering.
- The lawsuit claims the defendants defrauded the celebrity partners and treated LGNDS as their own personal piggy bank.
- The defendants are accused of entering into unauthorized sublicensing and promotional agreements, misrepresenting Carma’s valuation to investors, and diverting value through non-cash inducements.
- The complaint also alleges excessive compensation and bonuses were awarded to the defendants, reducing funds available to the celebrity partners and other stakeholders.
- The lawsuit raises conflict-of-interest concerns tied to Carma’s cannabis production and distribution relationships in Northern California.
Introduction to the Lawsuit
A lawsuit has been filed in the U.S. District Court in Illinois, alleging a conspiracy involving criminal wire fraud, embezzlement, and money laundering against four cannabis executives. The plaintiffs in the lawsuit include LGNDS, a Miami-based global hemp company, as well as former boxing champion Mike Tyson and professional wrestler Ric Flair. The defendants named in the lawsuit are former executives and shareholders of Carma, a Chicago-based branding company that was behind the celebrity cannabis brands. The lawsuit claims that the defendants defrauded the celebrity partners and treated LGNDS as their own personal piggy bank.
LGNDS’s Role in the Lawsuit
LGNDS purchased the rights to use Mike Tyson’s likeness on a range of products, including hemp, mushrooms, nicotine, and kava products, as well as merchandising such as apparel and footwear. The company was brought into the celebrity branding efforts to help launch an e-commerce marketplace with global shipping for three hemp-derived verticals: delta-8 THC, hemp-derived delta-9 THC, and CBD. At the time of the deal, LGNDS was branded as a market-leading hemp company with global reach and product innovation in hemp-derived cannabinoids. The lawsuit alleges that the defendants failed to uphold their end of the agreement, instead using Tyson’s and Flair’s names and intellectual property to market cannabis and hemp products outside the agreed licensing framework.
Alleged Misconduct
The complaint lays out a pattern of alleged self-dealing tied to how licensing rights and sponsorships were approved and monetized. The defendants are accused of entering into multiple sublicensing and promotional agreements without proper authorization, using Tyson’s and Flair’s names and intellectual property to market cannabis and hemp products outside the agreed licensing framework. The lawsuit also alleges that the defendants misrepresented Carma’s valuation to investors while selling personal shareholdings at a profit, and diverted value through non-cash inducements from business partners rather than routing licensing fees through the company. Furthermore, the complaint claims that a separate entity was created to commercialize Ric Flair’s likeness, with control later transferred to Carma without Flair’s informed consent.
Northern California Ties
The complaint raises conflict-of-interest concerns tied to Carma’s cannabis production and distribution relationships in Northern California. It alleges that one defendant held senior roles at both Carma and a cannabis investment firm with interests in Northern California cannabis operators involved in producing Tyson-branded products. Under a 2022 agreement, one such operator was to manufacture and market Tyson-branded cannabis flower and pre-rolls in exchange for royalties. The suit alleges that those payments were not made as required, and that obligations were waived in exchange for personal equity interests, leaving Carma to extend loans that remain largely unpaid. This raises questions about the defendants’ motives and whether they prioritized their own interests over those of the celebrity partners and other stakeholders.
Conclusion
The lawsuit filed by LGNDS, Mike Tyson, and Ric Flair against the four cannabis executives is a complex and multifaceted case that alleges a wide range of wrongdoing, including conspiracy, wire fraud, embezzlement, and money laundering. The complaint paints a picture of a group of defendants who prioritized their own interests and profited at the expense of the celebrity partners and other stakeholders. As the case moves forward, it will be important to watch how the defendants respond to the allegations and whether the plaintiffs are able to prove their claims. The outcome of the lawsuit could have significant implications for the cannabis industry and the way that companies do business with celebrity partners.
