Jefferson State Farms, based in Medford Southern Oregon, is suing a group of businesses and individuals who presented themselves as a co-op of hemp harvesters and processors for leaving them high and dry after having paid them six figures.
Ben and Kathleen Yuma own the Southern Oregon hemp farm. The hemp harvesters and processors consist of four individuals and three businesses that the Yuma’s met through social media. The Yuma’s are suing them for more than $11 million in damages.
According to the lawsuit filed by the Yuma’s on Wednesday in Jackson County Circuit Court, the plaintiffs claim that the business did not attempt to harvest the crop, which was 112,500 plants even though they had already paid a six figures deposit.
The three businesses include Palex Enterprises, Hemp Warehouse, and Great Horizons LLC, as well as the four individuals, were sued for civil fraud, illegal trade practices, and breach of contract. This is because Jefferson State Farm had paid them a $136,000 down payment to harvest the crop whose due date was October 9, but after they failed to deliver on their contract, they did not return $86,000 of the money paid despite having written two promises to do so.
The lawsuit further said that when the Yuma’s went to collect the money, their attempts were physically retaliated at a warehouse located in White City.
The lawsuit also highlights the challenges faced by the farmers during the region’s first season of growing hemp, such as early frost, bug infestation, mold, and lack of processing facilities within their area.
The Yuma’s said that they connected with the businesses and the individuals on meetup.com on September 30. The group referred to themselves as the “Southern Oregon Hemp Co-op” group.
The Yuma’s met with the group’s administrator, Robbie Lesa Horton, later that day at White City warehouse owned by Hemp Warehouse and Palex Enterprises, and during the meeting, Horton introduced his business partner Hon Morales, who is also mentioned in the lawsuit.
The Yuma’s wanted their crop to be harvested and dried, and Morales quoted a price of more than half a million dollars, of which the Jefferson State Farms signed a letter of intent to pay and also paid them a deposit of $ 68,000.
The following Monday, Robert Mansur and Stormmy Paul, who are also mentioned in the lawsuit, went to inspect and discuss the crop logistics. The Yuma’s paid another $68,000 in cash on the harvesting deposit.
On the agreed date of harvesting, the Southern Oregon Hemp Co-op was a no-show.
When the Yuma’s called Morales to inquire why they did not show as agreed, the lawsuit states that Morales subcontracted the harvesting services to Mansur and his company Great Horizons LLC, of which the Yuma’s were not aware since they were not consulted about this change.
The Yuma’s got hold of Mansur on October 14 on phone, and he acknowledged being contracted by morales and having received $100,000. But he promised to refund the money the following day through a wire transfer that never materialized.
The Yuma’s got $50,000 of their money back but never saw the remaining amount. At one point, Kathleen Yuma was assaulted and injured by Paul.
The lawsuit seeks to recover their remaining $86,000, and $200, 000 for replacing harvesting and drying services, as well as $11.2 million in damages. The defendants are yet to respond to the lawsuit.
Hemp industry analysts strongly believe that such suspected fraud is extremely annoying to industry players like Marijuana Company of America Inc. (OTCQB: MCOA) and Green Hygienics Holdings Inc. (OTCQB: GRYN) who know all too well the struggles that farmers have gone through to reach the point of harvesting their hemp plants during this first growing season after the passing of the 2018 Farm Bill.
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