By Mike Rogoway The Oregonian, Portland, Ore.
WWR Article Summary (tl;dr) One Portland Cannabis company claims its competitor created fake social media accounts to highlight sexual assault allegations against its former chief executive.
The Oregonian, Portland, Ore.
Cura Cannabis, which claims to be the biggest company in Oregon's legalized marijuana market, sued a rival in California on Friday over anonymous social media posts.
Portland-based Cura alleges a competitor, Bloom Farms, created fake social media accounts to highlight sexual assault allegations against Cura investor and former chief executive Nitin Khanna.
"(Bloom Farms) wanted to use false statements to induce retailers to stop selling Cura products, get consumers to stop buying Cura products, to divert sales of Cura's products to themselves and to other competitors, to harm Cura's ability to fundraise, and to reduce competition in the cannabis industry," Cura charged in its lawsuit, filed in Alameda County Superior Court in California.
The Portland Business Journal reported the suit Friday.
Cura sells wholesale cannabis oil to retailers under the brand name Select Oils. It asserts the social media campaign against it succeeded in undermining its reputation with consumers, diverting sales to Bloom and other competitors. The suit seeks unspecified compensatory and punitive damages, plus legal costs.
"We are disappointed to discover that another company in our community would sink to these lows and utilize such despicable tactics to hamper competition in the industry," Cura wrote in a statement Friday.
In his own statement, Bloom Farms chief executive Michael Ray did not specifically deny a role in the social media posts. Instead, he cast his company as a defender of free speech.
"This suit is yet another attempt by Select/Cura to bully competitors and silence individuals who are exercising their right to free speech by expressing their outrage and disgust over publicly available information on rape allegations against Select's founder Nitin Khanna," Ray wrote.
"As a company and individuals, we join and support those who advocate for equal opportunity and condemn all forms of sexual discrimination, harassment and assault," he said.
Cura says it has more than 500 employees and has raised $115 million, valuing the company at $400 million. It operates in Oregon, California, Nevada and Arizona.
In May, Cura sued unnamed people behind anonymous social media accounts, alleging they were defaming the company by highlighting the accusations against Khanna. Cura's CEO is now Cameron Forni, previously a sales executive at an Oregon company that sells agricultural products.
Cura used the May lawsuit to subpoena social media and internet companies, seeking the identities of the people behind the anonymous accounts. It dropped that case Friday as it brought the new allegations in California.
The litigation has served to highlight 2012 accusations against Khanna, who quit in May, citing the effect of the social media campaign.
In Friday's suit, Cura says Bloom defamed Khanna and the company with social media posts that claimed he had a "history of sexual assault charges." Using a narrow definition of the word "charges," the suit notes Khanna never faced criminal charges. He has, though, been accused of sexual assault.
A former Oregon tech entrepreneur and Portland tech investor, Khanna faced a 2014 lawsuit by his wife's former hairdresser. The suit alleged Khanna sexually assaulted the hairdresser on the morning of his own wedding in Newberg. Khanna unequivocally denied the sexual assault allegations.
The woman and Khanna settled the 2014 suit on confidential terms and Yamhill County prosecutors declined to bring criminal charges. Prosecutors said DNA evidence demonstrated sexual contact between Khanna and the woman but didn't show whether or not it was consensual.
"That is not to say that the sexual assault didn't happen exactly as the victim describes," county prosecutors explained in a memo on their decision. "The problem we have is that we cannot prove this case beyond a reasonable doubt."