NFL player Julio Jones and his legal cannabis company SLW have been sued by their parent company for allegedly diverting some $3 million a month in unreported cannabis sales since March 2021.
Genetixs filed the lawsuit against the Tennessee Titans wide receiver in the U.S. Central District of California on July 21 requesting a permanent injunction.
“They want to enjoin Julio and SLW from coming to the business, dealing with the business, and engaging in any black-market sales with the business,” said Josiah Young, a drug defense attorney based in Sacramento. “But that cuts into their contract, which probably says they are partners. So, they are asking the court to make a decision right now, cut these guys out of this deal because of their alleged malfeasance.”
The lawsuit was filed the same month that the California Franchise Tax Board stated in their annual Commercial Cannabis Activity report that privacy rules prevent them from revealing information on cannabis-related tax deductions and credits despite being obligated to do so by Assembly Bill 37.
In addition to Jones, defendants named in the federal lawsuit are ex-NFL player Sharod “Roddy” White, John Van Beek, Shaun Van Beek, SLW Holdings, The Rite-Lab, Xtreme Construction, John Van Beek Construction, Bunch Palms Trail, and Mehdi Tehranchi.
“Defendants looted, removed, diverted, and misappropriated Genetixs’ cannabis proceeds derived from more than 22 harvests, as well as the machinery, equipment, and fixtures located therein,” Genetixs attorney Marc Smith wrote in the complaint. “As a result, the Department of Cannabis Control has requested that Genetixs surrender its cannabis license on the basis that Genetixs is no longer conducting cannabis business at the Genetixs Cannabis Facility.”
The 12 causes of action include conspiracy to defraud, conversion, and breach of fiduciary duty.
“It would be really hard for Julio Jones, being an NFL player and being at training camp, to manage the affairs of his business, which is one of the risks of entering the cannabis industry,” Young told the Southern California Record. “You're entering an industry where, if you're not paying very close attention, you could be liable for something that not only is contentious because of a big amount of money but contentious because it's a brand-new legal industry.”
Jones’ partner, White, is a former NFL player for the Atlanta Falcons. He is 39 years old.
“It's difficult to function in this industry because there are high regulatory hurdles,” Young said. “There are high capital demands. There is a high propensity for partnership disputes because there's money and cash involved. This is an industry that was aggressively criminalized for the last 100 plus years of American history so because it was criminalized, you're dealing with necessarily an element that is coming out of the shadows.”
Young added that if he were representing Jones or White, he would not allow Genetixs to prejudice them as public figures by making false allegations.
“I'd be looking to separate my client's actions from potentially any of the adverse defendants,” he said.