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(A version of this story first appeared on Hemp Industry Daily.)
Federal securities regulators have accused six people of deceiving investors by promising astounding returns as part of an alleged $25 million scam for a supposed marijuana farm and CBD extraction facility in California.
The money was raised from more than 400 investors from across the country between September 2017 and February 2019, according to a lawsuit filed by the U.S. Securities and Exchange Commission in a California federal court.
Here are the basics of the suit:
- One group of companies formed by the individuals raised $12.3 million from 226 investors for a marijuana farm in Salinas, California.
- A second group of companies raised $13.2 million from 211 investors for an extraction facility to produce CBD, also in Salinas.
- The accused individuals, who are all from California or Arizona, claimed the unregistered securities would generate annual returns of “100% or more,” according to the SEC’s complaint.
- The defendants allegedly misappropriated at least $2.7 million of the investor money and lied about a supposed loan that would finance the CBD facility.
The money was raised under nine different entities:
- C Quadrant.
- Extraction Capital Tier 1.
- GPA Enterprises.
- Green Growth Ventures.
- RJ Holdings Group.
- Smart Initiatives.
- Target Equity.
- Valley View Enterprises.
- Zabala Farms Group.
The defendants listed in the complaint are Anthony Todd Johnson, Jeremy Johnson, Richard Portillo, Charles Lloyd, Mark Heckele and Michael Gregory.
The SEC is seeking a permanent injunction blocking the six defendants’ investment activity, plus penalties.
Regulators also are seeking repayment of the funds received from the allegedly illegal conduct, plus interest.
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