Bloomberg Law
March 1, 2021, 9:01 PM

Cannabis Investor Advances Fraud Suit Over Bloom Farms Financing

Mike Leonard
Mike Leonard
Legal Reporter

A Bloom Farms investor can move forward with claims that the cannabis company’s executives defrauded him with cooked books and wrongly ousted him from the board in retaliation for his challenge to its series E financing round, a Delaware Chancery Court judge ruled Monday.

The figures shown to Jeff Menashe appear to have been “formulated with the intent to deceive,” Vice Chancellor Morgan Zurn wrote, noting they were prepared by the company’s chief financial officer, “who only months later would plead guilty” for his role in a $1 billion Ponzi scheme.

“The dubiousness of the model’s input, the model’s ...