A Reno marijuana dispensary lies at the heart of a lawsuit alleging multimillion-dollar fraud, with co-owner Heidi Loeb Hegerich claiming her California-based partners at Terra Tech diverted profits to prop up failing ventures. Filed in late November in Washoe District Court, the complaint lists 50 claims including fraud, conspiracy, and elder abuse against the publicly traded company. The dispute exposes tensions in Nevada's fast-growing cannabis sector, where rapid legalization has drawn opportunistic players and strained partnerships.
Allegations Center on Profit Diversion and Financial Mismanagement
Heidi Loeb Hegerich, a philanthropist and widow of developer David Loeb, co-opened Blüm's Midtown Reno location in January 2017, months before Nevada legalized recreational marijuana sales. She invested partly because state cannabis taxes fund schools, aligning with her values as a grandmother, the suit states. Attorneys allege Terra Tech, based in Newport Beach, California, siphoned millions from the profitable Reno operation to support underperforming businesses, while dodging rent payments to Loeb Hegerich and fabricating loans she never received.
The complaint cites Terra Tech's own May quarterly report, which admitted deficient and incomplete internal financial controls. Loeb Hegerich trusted executive assurances of regular audits, only to learn the company relied on inexperienced staff for internal reviews. Her lawyer, Mark Simons, described the betrayal as devastating every aspect of her life, eroding trust in those she relied on most.
Company Denies Claims Amid Stock Plunge and Shareholder Fallout
Terra Tech dismissed the lawsuit as meritless in a Tuesday press release, portraying Loeb Hegerich as a wealthy, sophisticated investor prone to business disputes. Executives argued the real victims are over 120,000 shareholders harmed by her accusations, as company stock dropped more than 23 percent that afternoon on NASDAQ. The firm owns the Blüm chain, with dispensaries in Reno, Las Vegas, and California, leveraging the Reno site's success amid broader struggles.
Personal Ties and Industry Risks Come Under Scrutiny
The suit also targets Mikel Alvarez, Loeb Hegerich's longtime personal assistant, and his husband Garrett Alvarez. Positioned to manage the Reno site, Mikel Alvarez instead oversaw all Terra Tech dispensaries and facilitated fund reallocations, according to the filing. Alvarez declined comment Tuesday via text, citing legal advice. Simons noted the case highlights misconduct common across industries, but Nevada's cannabis boom—fueled by 2017 recreational legalization—amplifies vulnerabilities as unvetted operators flood in. Whether this sours Loeb Hegerich on cannabis entirely remains uncertain, though it underscores the hazards of rapid market expansion.
