The prominent marijuana activist who played a pivotal role in passing Oregon’s legalization measure that was recently sued by The Weed Blog is now countersuing—seeking money owed and the dissolution of the company. Could this be the end for the popular weed website?
Last month Christopher Young who goes by the name Johnny Green and Jeffrey White who uses the pseudonym Jay Smoker or Ninja Smoker, Maurer’s former partners in the Oregon-based cannabis news and information site, sued Maurer seeking at least $51,000 in damages. They allege that Maurer used the company’s finances to cover personal expenses. The suit accuses Maurer, who served as the blog’s chief financial officer, of transferring money from the company’s bank account to his “various personal accounts” to pay “personally incurred debts.”
Young and White also accuse Maurer of failing to maintain the company’s registry with the Oregon Secretary of State, failing to file tax returns and failing to respond to potential advertisers “resulting in a significant number of lost sales and damage” to the blog’s reputation.
As a result of Maurer’s actions, the suit alleges, the blog’s “bank accounts have been depleted leaving insufficient funds” to cover its operating costs. As a result White and Young said the company has experienced significant loss of revenue and advertising sales.
In the countersuit obtained exclusively by Stuff Stoners Like, Maurer—the majority shareholder of The Weed Blog—claims he was not and is not involved in the breach of fiduciary duties and denies many of the accusations. His counter alleges that beginning about the time the trio formed a Limited Liability Company (LLC) he loaned it money to give to Young and White and for business expenses. In the suit he claims that from February 2013 through October 2013 he loaned the LLC $22,500 for the benefit of Young. During that same period of time he loaned the LLC and additional $35,500 for the benefit of White. And because the blog’s server was located in White’s apartment he loaned the LLC an additional $4900 during that same time to pay a portion of White’s rent. Maurer claims he continued to loan money to the LLC from November 8, 2013 through approximately August of last year—some of which was repaid and some was not.
According to the suit Maurer also claims that in May 2015 White sold five percent of his units in the LLC to MQH, LLC for $25,000. MQH is a company that Leah Maurer, Travis’s wife and Randy Quast own together. Quast is also suing Maurer in a separate case. (Travis Maurer is also being sued in a 3rd case.) As a result of the unit transfer White now holds 314 units and MQH holds 16 units of the LLC. (Maurer owns 340 of 1000 units issued and Young owns 330.) According to the July 26, 2014 Unit Transfer Agreement (UTA) the managers acknowledged that the LLC owes Maurer $75,000 representing loans Maurer had made to the company.
The UTA also included salary details that Maurer claims were breached. White was to receive a salary from July 30, 2014 to July 30, 2015 in the monthly amount of $2500, for a total salary of $30,000. Young was to receive, within the same year, a total salary of $100. However the suit claims that between July 30, 2014 and July 30, 2015, White paid himself approximately $33,500 by withdrawing funds from the LLC accounts. He took $3500 more than his agreed salary. He did so without the LLC or Maurer’s consent or knowledge. And between July 30, 2014 and July 30, 2015 Young withdrew from the LLC accounts approximately $6000. He took $5900 more than his agreed salary without the consent of the LLC and without the knowledge or consent of Maurer. The suit also alleges that between July 30, 2015 and November 15, 2015, without LLC authorization or Maurer’s knowledge White withdrew an additional approximately $21,000 (about $7000 per month) and Young withdrew an additional approximately $14,500 (about $5000 per month). According to Maurer it was these withdrawals that left the LLC unable to meet its financial obligations.
Maurer also claims that “Young failed to cooperate in any meaningful way in his attempt to fulfill his duties as the Chief Financial Manager.” In the suit he alleges that Young wouldn’t cooperate with the staff Maurer brought on to manage sales. He claims that Young also refused to provide Maurer with information on the terms he negotiated with that new salesperson and that Young gave that person direct access to LLC accounts from which that person made withdrawals without the consent of Maurer or the the company. Maurer claims that Young also interfered with attempts to close at least one deal with a potential advertiser by posting negative content on the website about it.
Maurer, in the countersuit, also claims that Young refused to allow him to hire an accountant or bookkeeper “who would have instituted checks and balances and ensured the LLC prepared and filed tax returns.” The suit also states that “Young simultaneously refused to allow Maurer any kind of input whatsoever regarding content, keeping sole control of it and threatened to or did quit at times, knowing he was the only manager with access to passwords that would allow others to add content to the website.”
Maurer also says in the suit that White has likewise failed to cooperate with his attempts to fulfill his duties as Chief Financial Member— including violating the code rules of Alexa which led to a large decline in Alexa ranking that harmed the LLC’s website traffic. Allegedly that violation also damaged Maurer’s efforts to attract advertisers. Maurer also claims that White has also threatened a number of times to “quit” causing havoc to the business and diverting attention away from attempts to attract advertisers.
In addition to his attorney fees Maurer believes that the compnay owes him $75,000 as payback of loans. And because the payment schedule was not met the company has violated the terms of its UTA. As a result Maurer seeks to dissolve The Weed Blog and liquidate all of its assets.
We will keep this story updated as it continues…
Leave a Reply