"$32 million" for a whole lot of nothing, claims lawsuit.
Mockingbird Cannabis rolled into Mississippi a few years ago as the medical marijuana industry became a reality. Company officials talked big about hiring Mississippi employees and recruiting a stable of Mississippi investors. However, a group of investors recently sued current and former officials of the company, alleging they treated their investments as a slush fund while looting the company.
Mockingbird Investors Winston Thompson, Nathan McHardy, Tonyatta Hairston, Marcus Burger, Kim Hardy, Brandon Baggett, Jay Baker, Patrick Taylor, Palo Giscombe, Christian Groff, Zachary Harvey, Kevin Merritt, and their respective LLC's filed a motion for leave to file an amended complaint against Clint Patterson, Ralph Wilkin, Andrew Bunch, Marcy Croft, Esq., Samuel Millette III, John Coshmich, Richard Brown, Chuck Josenhans, and three John Does in Hinds County Circuit Court on September 18.**
The plaintiffs filed their first complaint on July 3. Millette filed a motion to compel arbitration, arguing the plaintiffs signed an operating agreements that required arbitration to settle disputes. An amended complaint was filed on September 18 and approved by the Court Tuesday.
An Oklahoma crew of Clint Patterson and friends blew into town when the medical marijuana initiative gathered a full head of steam in 2020. Patterson, Wilkin, Bunch, and Croft formed Mockingbird Cannabis, LLC in 2020 and Mockingbird Holdings, LLC in January 2021. They filed Form D's with the SEC stating the companies were exempt from registration.
The medical marijuana initiative made it to the ballot in 2020. The good times were about to roll. Patterson bragged to Mississippi Today in 2022:
Patterson saw the way medical marijuana impacted his home state of Oklahoma, where he started his businesses. Once-abandoned warehouses and factories are going to have second lives as hydroponic grow houses. Property values overall will go up, he said.
His company’s Mississippi operation — Mockingbird Cannabis, named for the state bird — has taken over a 163,000-square-foot building that once housed the state’s Department of Revenue in Clinton. Mockingbird has invested $30 million in the facility, Patterson said, and it will support up to 200 new jobs.Article.
Mockingbird recruited Mississippi investors. The Mockingbird Crew "encouraged" investors to set up LLC's and invest through them. The plaintiffs followed the instructions. The complaint states the defendants pooled the money into a larger LLC. The lawsuit called the arrangement "a pyramid." The company established facilities in Raymond and Clinton.
The complaint claims although Millette told investors the decision was only a speed bump, Patterson eyed getting a medical marijuana license and facility in Missouri. Thompson allegedly told Patterson he could not use the investors' money for such a purpose. The complaint claims Patterson removed Thompson from the board of directors.
Patterson, Wilkin, Bunch, and Croft set up shell companies in Missouri, funding them with $4 million allegedly withdrawn from the Mockingbird (Mississippi) investments, and obtained a license and facility in Missouri. They named the facility "Navarro Farms."
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| Credit: Mockingbird Facebook page |
The Gang of Four allegedly offered shares of Navarro Farms to the Mississippi investors without disclosing they were already funding the operation. The complaint accuses the Gang of Four of engaging in more shenanigans:
* Investors funds were allegedly used as personal slush funds. The complaint charges Mockingbird paid $2 million in management fees and another $1.5 million in travel expenses in 2021 and 2022 to a number of officials and directors. No records of the compensation were ever produced despite requests from investors, if the complaint is to be believed.
* Patterson and Wilkin allegedly diverted $7 million from Navarro Farms to buy out partners in another operation. The facts of said buyouts are not known as the Defendants (allegedly) would not produce any records.
* The complaint charges Croft shirked her duty as company lawyer to comply with state and federal law as well as any contracts. She stands accused of allowing Patterson to engage in unlawful activity or expose Mockingbird to liability. She did not ensure the company kept adequate financial records while investors money was "misappropriated."
* The 160,000 square foot Raymond facility was valued at $25 million. However, Patterson sold it to Gaylon Patterson of the Patterson Family Trust in Oklahoma for $10 million. Gaylon is Clint's uncle. The complaint claims Gaylon, Gary Patterson, and Elizabeth Patterson are members of the trust. Gary is Clint's firs cousin. Elizabeth is married to Gary.
The trust leased the facility back to Mockingbird at $100,000 per month for 10 years. Investors claim they had no clue the transaction took place.
The plaintiffs claim Millette and Brown consented to the sale as members of the Board. However, they told investors the facility was a fixed asset, not leased property. The complaint states an April 2024 update said the Raymond facility was a company asset while never admitting it was no longer owned by the company. The investors asked for records of the transaction but the defendants allegedly would not provide them.
* The complaint claims Josennhans admitted $8.3 million "had been misappropriated. Wilkin allegedly fessed up to loaning investors' funds to fund operations in other states while lying he divested himself of all Mockingbird and Navarro Farms holdings. However, filings at the Secretary of State's office state Wilkin was still the manager.
* The plaintiffs requested the following records but to no avail: all operating agreements, an organization chart, names of Board members as well as their terms, identities of all corporate officials as well as their starting and ending dates of employment, minutes of all meetings of the Boards of Directors, and a schedule of all who hold "units or interests."
The plaintiffs claim the true state of Mockingbird and Navarro Farm's assets are unknown. The following passage says it all:
The true state of Mockingbird's and Navarro Farm's assets today is unkown. but Plaintiff's losses are clear: There is nothing to show for their investments - Defendants can not even tell them who owns what today - and Mockingbird, which raised as much as $32,000,000 has nothing.
* The lawsuit takes full aim at the Jackson law firm of Cosmich, Simmons, & Brown. It alleges John Cosmich and Brown's brother served on the Navarro Farms Board of Directors. Brown and partner Warchol allegedly solicited investments for "Mississippi Grow" and "Missouri Grow."
Cosmich lawyers stand accused of helping investors establish LLC's while assisting them with background checks and disclosure forms.
The plaintiffs claim Cosmich, Simmons, & Brown PLLC is a "substantial investor" in Mockingbird. Cosmich is allegedly counsel to Mockingbird.
The complaint charges the defendants with the following counts:
I: Violation of Mississippi Code Section 79-29-315, failure to provide records
II: Violating Mississippi Securities Act. The law require sellers of securities to register securities and provide investors with any information needed to make an investment decision.
III: Violation of MSA by Patterson, Wilkin, Bunch, Croft, Brown, Millette, and John Does for selling securities without registering as broker-dealers.
IV: Breach of fiduciary duties
V: Civil Conspiracy.
VI: Aiding and abetting
Attorney Allyson Mills of Lamar Adams fame represents the plaintiffs. The case is assigned to Circuit Judge Debra Gibbs with Special Guest Star Judge Barry Ford.
* The plaintiffs and their LLC's:
Marcus Burger: NLWH, LLC
Nathan McHardy: Red Work Capital, LLC, Fire Wheel, LLC. Disclosure: McHardy's Briarwood Liquor Store is an advertiser on this website.
Winston Thompson: Cropshare, LLC
Tonyatta Hairston: Felix Allen, LLC
Brandon Baggett: BBG Investments, LLC, Salo Investments, LLC
John Burns: High Times, LLC, High Times Two, LLC
Kimberly Hardy: Generational Wealth Investments, LLC
Palo Giscombe & CHristian Groff: Petit Bois 68, LLC
Zachary Harvey: 2901 Investments, LLC
Patrick Taylor: DFT Capital, LLC
** Defendants
Patterson is CEO of Mockingbird, Navarro Farms, and Navarro Farms Vandalia Oklahoma resident.
WIlkin is COO of Mockingbird and Chairman of the Board of Navarro Farms. Oklahoma resident
Bunch is CFO of Mockingbird. Oklahoma resident
Croft is a Madison attorney and was Chief Legal Officer of Mockingbird.
Millette is a Director of Mockingbird companies
Brown is manager of Navarro Farms and several Mississippi LLC's. He is a partner in the Jackson law firm Cosmich, Simmons, & Brown.
58 comments:
Oh no!
“alleging they treated their investments as a slush fund while looting the company.”
Why do I get the feeling Mockingbird isn’t the only medical marijuana company in Mississippi that might have investors “alleging they treated their investments as a slush fund while looting the company?”
Asking for more than one friend.
the plaintiff investors are stupid mississippi rednecks who got hustled by a smooth line from an out - of - state hustler. what else would you like to know? a fool and his money are soon parted.
This kind of crap was inevitable. Where's Lee Yancey now?
Puff puff pass.
Shocked that companies that were seeking $500k for a 1% ownership had potential for fraud. Not sure this companies investment requirements.
It’s no different than OpenAI and FTX. Just another fast talking nepo-shyster backed by his (((connections))) which is often business as usual in America.
Only certain highly qualified investors have received this invitation.
Hurry!
You won't want to miss this rare opportunity to get in on the ground floor.
Limited time offer!
🤣
Fools and their money...
Looks like a potential future episode of American Greed.
Hard to believe this could happen in the 'Sip, are there any Hotty Toddy connections?
I have no sympathy for those who get scammed while being mixed up in the weed industry. And I don't care how "legal" our esteemed lawmakers made it. It's still a bunch of dope pushers and dope heads.
Yes, all that tax revenue flowing in to state coffers and the unending miracles of this wonder drug!! Hope Not Dope.
I bet many a cartel leader wishes they would have invested in this business opportunity instead of just using US "legal" Weed Sales as a front for their untaxed lower priced indistinguishable dope, right?
The miracle drug!!! From snake oil to tobacco to weed, the substance abusers bring mighty profits. All those chillun cured by Mama and Pappaw's favorite buzz. Win win!
At least one of the investors named in the complaint is featured in your advertisements every day on this blog. Not that it matters, but just jumped off the page.
Don't forget to hit the tip-jar real hard when they pass the plate next Sunday. After all, everybody is pushing SOMETHING or other.
man you could replace everything in your ignorant comment with Medical doctors and prescription Opioids. And we can bet on which one has been more destructive to America. Let ne give you a hibt. The Sassoon and Rothchild families didnt enslave and plunder Imperial China with cannibas. Theydid it with Opium.
Go look in the list of plaintiffs and LLC's. It's included and highlighted.
So Winston Thompson, Antar’s buddy, pocketed a windfall in the Siemens litigation only to blow it on canabais. Sounds about right.
Smoke and mirrors? Even Cheech and Chong wouldn't fall for this grift.
Reefer Madness v2.0
something went wrong in the weed business. Who could have seen that coming...
What's interesting is how much sleaze this new industry has attracted.
Mississippi doesn’t have the market cornered on sleazy operators in new industries. See, e.g., SBF and other crypto crooks. History repeats itself because investors are so eager to buy in they invest with crooks. In crypto Blackrock, Fidelity and other adults are slowly taking over the industry. Something similar will likely happen with weed in Mississippi.
It will be interesting to see if the Choctaw tribe opens a rec weed store like the Cherokees have done in NC.
The sleeve is whoever wrote the restrictive legislation. It’s funny how you can be eligible to harvest through the USDA but not with Mississippi legislation. The real real kicker is PE and Hedge Funds have been watching since the inception realizing that 90% of the cannabis businesses will fail, then they will come in and buy them for pennies on the dollar. The investors(marks) are disenfranchised from the way real investors really work. Mississippians money isn’t long enough for that game.
The sleeve is whoever wrote the restrictive legislation. It’s funny how you can be eligible to harvest through the USDA but not with Mississippi legislation. The real real kicker is PE and Hedge Funds have been watching since the inception realizing that 90% of the cannabis businesses will fail, then they will come in and buy them for pennies on the dollar. The investors(marks) are disenfranchised from the way real investors really work. Mississippians money isn’t long enough for that game.
Newsflash - this is a securities case…..pretty simple….and very ugly
this is going to be as big a ripoff as the lamar adams / madison timber ponzi scam.
the attorney who headed up the madison timber clawback is attorney for the plaintiffs.
anyone stupid enough to gamble on the medical marijana wild west lottery deserves to loose their money. here's the defense.....defendants gonna say ''this was just a business deal gone bad....sorry''
Does it bother anyone that this type of corporate stupidity seems to happen often in MS? I mean this, express grain, Lamar Adams, just off the top of my head? As Dave Chapelle famously said “who gave these people money?” Seems like the wealthy in this state are some of the most gullible people on earth? Strange indeed.
How many (more) times do I need to tell y'all, no good comes from weed. Not ever.
Why ya think it’s called “dope”?
Hand cuffs and jail ain’t cute for these folks.
The usual cast of nay-saying loud-mouths have opined so far. All of them, of course, are medical experts and have written articles on cannabis, THC and brain dynamics.
You can find them on Sundays standing on the backs of Conestoga wagons in front of Southern Baptist churches hawking pamphlets and passing plates.
Kingfish said...
Go look in the list of plaintiffs and LLC's. It's included and highlighted.
Well, Brother Fish, my scroll-fanger is tired of scrolling looking for a highlighted list. Can you give directions as to its whereabouts (without being a smart ass)?
Sleaze? And just who the hell are you to pass judgment on investors?
Who said I was? I meant the MM in this state, not these investors. Well, if you noticed, there is an asterisk after the plaintiffs. Scroll to bottom of post, just above lawsuit. You will see it.
Where is the facility located in Raymond? Is that a reference to the former plant nursery in rural Hinds County that happens to have a Raymond mailing address? If so, that facility has been abandoned. It was never brought into compliance with the MM regulations.
5:43 Dopers like yourself love to reference some kind of science or article written by some supposed scholar. Denial is usually the problem when it doesn’t require a literate person to see the immediate and long term affects of dope, yet you reference something you’ve never read in an attempt to convince naysayers. Loser
It’s on Springridge Road, just south of the corporate limits of Clinton. Just happens to have a Raymond zip code.
The title of this article should be “ so that’s what Winston Thompson and his boo did with that Siemens money”
@3:35 pm
I once knew Marcus Burger, son of Carol Burger. Marcus was the fastest 16 year old sprinter n the state of MS, he attended St. Joseph's. His mother was president of United Way, he achieved a degree in mathematics and an executive position in the Insurance business. So not a redneck as insinuated.
people can still buy higher quality weed at a better price off the street . i hope this entire industry goes belly up.
iv'e been in those dispensaries . they let only 2 people in at a time. the clerks fancy them selves as bartenders in a take out bar and expect to be tipped 20% of the purchase price. this industry is nothing but a get rick quick scam and it won't last.
If you can't find the sucker at the table, you're it." - Warren Buffet
It seems like bad things happen when law firms promote investments and outside businesses.
Maybe we should just stick to practicing law. It's a full-time job.
Attention: It's Lose, not LOOSE..and Effect not AFFECT.. thank you.
7:22, what clawback? Investors have returned zero profits. Scam all around
The reading comprehension impaired struggle mightily Kingfish with asterisks.
Doctors warn of significant increase in people hospitalised with psychosis after being prescribed medicinal cannabis
Mississippi is a paradise for scams since there is no state regulation and an infinite good old boy system. I was invited to invest in several Mississippi cannabis companies (not this one) and turned all of them down as being very likely bad investments.
Who are the John Doe? I was approached by an individual not named telling me to set up an LLC to purchase stock. "Guarantee big returns. I had my Lawyer look at the financial and stock proposal. It sent red flags up all over the place!
to 9;20.......too bad for your buddy marcus , that run from this deal.
When the legal reefer investment pitches were sending out invites to their presentations, it was well known in the investment circles that “this group out of Oklahoma was trouble”. I heard it multiple times from people these companies sought to invest in the devil’s lettuce, I mean “medicine”. These people were prominent businessmen and church going folks. Some whose names don’t want to be associated with the bud-business.
I would be willing to bet they 95-97 percent of cards that have been issued are for PTSD. Sorry but that isn’t legit and the whole industry is a giant fraud.
8:25 if you ever get cancer, you might change your mind.
There was a guy that went by the name AC Sippy who was on top of all the shenanigans. He was right about a lot of stuff. I don't know what happened to him but we need him back.
I love all the comments insinuating this happened specifically because it was an industry they're morally opposed to as if investment scams aren't a tale as old as time and have happened in every imaginable industry
How can a case involving potential Fraud go to arbitration? Why aren’t these ‘so called investments’ regulated by the Secretary of State?
Not approving your two comments. They are fine but for the last sentence. You're not worth a slander suit.
Worked with them personally, this all is true and makes sense as this is how they did business. Sorry for anyone involved with them. Dirty dirty dirty. To their wives and families too. Let alone just this.
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