Heidi Loeb Hegerich, co-owner of the Reno-based Blüm marijuana dispensary, accuses her business partners at California-based Terra Tech of siphoning millions in profits to prop up failing ventures. The lawsuit, filed in late November in Washoe District Court, levels 50 claims including fraud, conspiracy, and elder abuse against the publicly traded company. This dispute exposes tensions in Nevada's fast-growing cannabis sector, where rapid legalization has drawn opportunistic players.
Betrayal at the Heart of a Thriving Dispensary
Loeb Hegerich, a philanthropist and widow of developer David Loeb, joined forces with Terra Tech executives to launch Blüm's Reno location in January 2017, months before Nevada legalized recreational marijuana sales. She invested partly because state cannabis taxes fund schools, aligning with her values as a grandmother. Attorneys Mark Simons claim Terra Tech exploited her trust, redirecting Blüm Reno's success—bolstered by legalization—to struggling operations elsewhere, without specifying destinations in court documents.
Financial Irregularities and Broken Promises
The complaint details avoided rent payments to Loeb Hegerich and falsified loans she never received. Terra Tech's own May quarterly report admitted deficient and incomplete internal financial controls, contradicting executives' assurances of regular audits. Loeb Hegerich later learned reviews came only from an inexperienced in-house finance team, raising questions about oversight in a high-stakes industry.
Company Response and Broader Fallout
Terra Tech dismissed the suit as meritless in a Tuesday press release, portraying Loeb Hegerich as a sophisticated investor prone to partner disputes. The statement highlighted harm to over 120,000 shareholders, whose NASDAQ-listed stock plunged more than 23 percent that afternoon. The case also names Mikel Alvarez, her former personal assistant turned Terra Tech dispensary manager, and his husband Garrett; Alvarez declined comment via text.
Warning Signs in Cannabis Business Expansion
Attorney Simons described the betrayal's toll on Loeb Hegerich's life, while noting such misconduct occurs across industries. Nevada's cannabis market, legalized for recreation in 2017, has exploded, attracting inexperienced operators amid lax initial regulations. This lawsuit underscores risks for local investors partnering with out-of-state firms, potentially deterring participation as the sector matures and courts scrutinize profit flows.
