In September 2024, one of Missouri’s largest and most successful marijuana cultivator’s plan to stiff its consultant went up in smoke after a $3.6M+ judgment was entered against it based on its wrongful termination of a consulting agreement. In 2019, the firm’s client, one of the first marijuana producers in Colorado, contracted to advise the St. Louis company as it entered the new Missouri medical marijuana market. The firm’s client guided the St. Louis entity and its principals in every aspect of its business, from construction of its greenhouse complex through start-up, cultivation, manufacturing of edibles, and the marketing and sale its products. The contract called for the client to be paid 3% of the cultivator’s gross sales for five years. In November 2022, Missouri voted to expand the marijuana market to include recreational sales of marijuana in addition to the ongoing sale of medical marijuana. Recognizing that it would realize significantly more revenue from the recreational marijuana market, and have to pay the firm’s client more under the consulting contract with the firm’s client, the St. Louis company immediately declared a default and terminated the final two years of the parties’ contract.
Murray Weiner and Erin Leach represented the client. The firm’s client sued the St. Louis company for breach of contract in the El Paso County, Colorado District Court. After a week-long trial, the Court found the St. Louis company’s termination of the contract was a sham, calculated to avoid paying the firm’s client the 3% of gross revenue to which it was entitled. The cultivator’s gross revenue in the Missouri medical and recreational markets for 2023 and 2024 the gross revenue was projected to exceed $70 million. The Court determined that because the termination of the consulting contract was wrongful, it went up in smoke, and the St. Louis company had to pay the firm’s client the balance of the money owed it under the consulting agreement. Judgment was in the amount of $3,640,000 plus attorneys’ fees, interest and costs.