A county judge in Oregon has dismissed the bulk of claims in a securities fraud case involving two U.S. cannabis companies, citing jurisdictional grounds.
The Multnomah County Circuit Court rejected claims against cannabis entrepreneur Nitin Khanna in a legal battle involving CBD maker Sentia Wellness and investors led by Boris Jordan, the Russian-American executive chairman of Massachussetts-based marijuana giant Curaleaf Holdings.
Lawyers for Khanna successfully argued that agreements between Sentia and the investors require disputes to be resolved in New York, leading the court to dismiss the claims. A claim of “breach of fiduciary duty” is still active in the Oregon case, and the plaintiff investors said they would pursue the dismissed fraud claims elsewhere.
Sentia, where Khanna was once CEO, was acquired by Curaleaf in 2020. The investors, who made $74 million in unsecured loans to Sentia, claim Khanna provided false information regarding the investment opportunity. Sentia ultimately was shut down, with the company blaming unspecified regulatory matters and the impact of the covid-19 pandemic.
The investors first brought their case in January 2022. Khanna later countersued Jordan and the other plaintiffs who brought the securities fraud case for $650 million, denying the investors’ claims and accusing Jordan and others of “unjust enrichment and breach of fiduciary duty” in their management of the assets of Sentia Wellness.
Sentia was a spinoff of Portland-based Cura Partners, where Khanna also once served as CEO. He resigned from that position in May 2018 amid a personal scandal surrounding a settlement he made with a woman who accused him of rape in 2014.