Eaze Cannabis Delivery Company Accused of Fraud

The founders of the Green Dragon cannabis store chain in Colorado have accused Eaze, the largest cannabis delivery company in the United States, of fraud. Alex Levin and his parents, Andrew and Lisa, who founded Green Dragon, filed a lawsuit claiming they were victims of a scam orchestrated by Eaze employees. According to the Levins, they were deceived into selling their cannabis stores after Eaze concealed the company’s dire financial situation. Following the merger—which the plaintiffs describe as a hostile takeover—they were effectively removed from managing the business, excluded from board meetings, and in February 2023, were forced to resign from their positions.

Loss of a Thriving Family Business

Alex Levin claims that Eaze employees took over and destroyed their successful family business, resulting in multimillion-dollar losses for his family. The Levins are seeking compensation from the defendants, who include investors Thomas Jermoluk and James Clark (owners of 35% of Eaze shares), as well as Eaze CEO Cory Azzalino. The accused parties deny the fraud allegations and plan to defend themselves through all available legal means.

Allegations of Financial Misrepresentation

The lawsuit alleges that Eaze was on the verge of bankruptcy at the time of the merger. In 2021, when Eaze representatives approached the Levins, CEO Cory Azzalino claimed the company had $20 million in cash reserves, which would grow to $70 million after the next funding round. However, the plaintiffs state that Eaze had already spent most of its investor funds and was nearly insolvent. Without the merger with Green Dragon, Eaze would not have been able to pay its employees in early 2022.

Eaze’s Response and Financial Status

Cory Azzalino has not commented directly on these allegations but stated that Eaze is now in a stable financial position and expects to break even by the end of 2023. He did not deny that the company is still operating at a loss. According to economists, Eaze has raised a total of $202.5 million in investments, and its annual revenue is estimated at $110.1 million.