Hemp farmers caught up in the wake of the Bluegrass BioExtracts closure and subsequent litigation will be meeting in Beaver Dam on Tuesday, Jan. 28, to weigh their options moving forward.
Beaver Dam-based pharmacist-farmer John Fuller has invited other hemp farmers that contracted with the company to brainstorm and get “on the same page,” he said.
“We will probably have 15 or so farmers,” he said. “A majority are the ones that want to make a difference in the industry and aren’t going to just sit back and let someone take advantage of them. We will be discussing lawsuits that have already been filed or may potentially be filed by others. The main goal is to get everyone on the same plan and figure out what a good action plan would be.”
The company was originally owned by Owensboro native Bruce Peters and Owensboro-based physician Gerald Edds. Edds and Peters sold the company to Reno, Nevada-based Limited Liability Company DTEC Ventures in October. New York-based Nathan Yates now acts as the company’s managing director.
Edds and Peters filed a $69 million lawsuit in Jefferson County Business Court through Louisville-based law firm Bingham Greenebaum Doll LLP on Jan. 21. The suit claims that DTEC, after taking ownership of BBE, located at 931 Wing Ave, “unequivocally failed to honor their obligations under the Purchase Agreement and the Royalty Agreement.”
The suit alleges that DTEC failed to pay Edds, business partner Bruce Peters as well as other “members” listed in the suit, a “single penny,” of the selling agreement and instead began, after acquiring all of BBE’s equity interests from “Members,” to “divert BBE’s assets, including cash and equipment” in violation of the agreed-upon purchase agreement. DTEC also shut down operations at BBE and failed to honor BBE’s contracts with contractors, suppliers and failed to pay existing employees, according to the lawsuit.
Edds sent a letter to farmers on Monday informing them that while he and Peters attempt to regain control of the company, farmers will need to decide to pick up their crop or leave it, according to the letter.
“Because this litigation may be prolonged and last up to a year or more, those of you having hemp stored in the plant will need to make a decision whether to leave it there or pick it up. The building is on lockdown by a judge’s order and if you decide not to take a chance on getting your hemp processed in the near future, you will need to contact DTEC’s attorney, Kevin Eddins.”
Fuller signed with the company in April with the promise of receiving $4 per cannabidiol (CBD) point. A deal, originally made with Edds and Peters, would have made Fuller roughly $500,000 for his contracted 18 acres. He, like others that signed with the company, began receiving test results showing that his hemp had high amounts of heavy metal.
Fuller sent samples of his product to five agencies for tests, including Lexington-based Cannabusiness Laboratories, which Bluegrass BioExtracts used for its testing. All of these tests returned showing that his crop was 100% clear, Fuller said.
The meeting Tuesday will allow farmers to share their experiences while heeding the advice of legal counsel as well as processors vetted by Fuller, he said.
“We need questions answered,” he said. “Are we to the point where we need to seek some recoupment from whatever entity they want to call themselves before they file for Chapter 11 or sit back and wait and hopefully Dr. Edds will take back the company and be ethical? There are a lot of questions that I don’t necessarily have the answers for, but I am trying to get the answer for people that have been affected.”
Fuller’s goal is simply to aid his fellow farmers, many of whom have been left in dire financial straights, he said.
“For our farm, we had $300,000 worth of operating expenses,” he said. “You have a contract that says you’ll be bringing in about $500,000. It isn’t a get rich quick scheme. It is a whole lot of work ... It has left me in a bad situation, and I can only imagine for someone who gave up tobacco this year or a crop that they knew they were going to make money on as their sole source of income to now just be left with a whole bunch of biomass that they can’t get rid of. I am just trying to provide some good answers and solutions and help some people out. I have no vested interest in any of it except to get on the same page and see what people think and if they have a similar situation to me.”
Jacob Mulliken, 270-228-2837, firstname.lastname@example.org