A Philadelphia judge has ruled that the former owners of Ilera, an early Pennsylvania medical marijuana dispensary, defrauded their partner Shannon Hexter and now owe her $24.5 million.
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In 2016, Ilera became one of the first businesses in Pennsylvania to receive a "super license" to cultivate and sell cannabis. Hexter, who held a 12% equity stake in the company, alleges that she was misled into giving up more than half of her share in the business based on false financial information.
Hexter, a Penn State graduate from Maryland, had partnered with Ilera through her business, Big Bite Real Estate LLC, leasing land in Fulton County for cannabis cultivation. She claims that former Ilera CEO Greg Rochlin and CFO Lisa Gray persuaded her to swap 8% of her Pennsylvania stake for a 4% share in Ilera’s Louisiana venture, claiming it would be more valuable. The defendants allegedly told her the Pennsylvania company was valued at $59 million, though it sold for significantly more shortly afterward.
In 2019, Ilera's Pennsylvania operation was sold to TerrAscend, a Canadian cannabis company, for $125 million to $225 million. Hexter claims the deal resulted in her losing $10 to $18 million due to the swap.
The 2020 lawsuit names Ilera Holdings LLC, Ilera Healthcare LLC, and five of its executives, including Rochlin and Gray. TerrAscend is not involved in the lawsuit.
According to Hexter’s lawyer, David Feuerstein, the case involves a group of seasoned investors taking advantage of Hexter by concealing key financial details. Defense lawyers argued that Hexter was experienced in the industry and voluntarily entered the deal. They maintain that she is unhappy with the outcome but that the transaction was fair.
Philadelphia Court of Common Pleas Judge Paula Patrick ruled in Hexter's favor after a four-day trial, awarding her $24.5 million. The defendants plan to appeal the decision, stating they disagree with the court’s findings.
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