Make sure you read my 1st post. This is the rest of the CIGN initial filed complaint and lawsuit CIGN vs FTH and Fluent
Continued the CIGN Lawsuit - Facts and allegations
After August 23, 2021 the CIGN Facility became able to grow THC under the contract with Fluent who is part of Cansortium Inc ... with Fluent's license.
Fluent announced this in a PR Augist 23, 2021:
New Facilities Increase Florida Cultivation Footprint to Support Expanded Offerings
Fluent received approval from the Florida Dept of Health to commence operation of a new 43k sq ft greenhouse cultivation facility in Homestead, Fl. The new greenhouse will enable us to quickly increase our monthly supply of biomass which we plan to convert into high quality CBD and THC oil to be sold throughout our dispensary network in Florida said CEO Robert Beasley. The Homestead facility has a proven track record in camnabis and is in turn-key condition.
The Homestead facility, a newly acquired facility for the Company, will support expanded offerimgs from the Company's line of CBD and Blend products.
Fluent by Cansortium Inc PR
Before this announcement around April 2021, CIGN by and through Michael Feldenkrais were introduced to the Defendents FTH/Fluent amd had a series of conversations and negotiations.
The parties executed the written service agreement around June 10, 2021.
The service agreement is for a 5 year term.
Pursuant to service agreement Section 3, FTH was required to pay for ANY construction/capital improvement to the facility to be in compliance with the requirements set forth by the State of Florida and any upgrades.
Section 4 of the Service Agreement lays out the compensation schedule for THC:
$45 per plant for Year 1, $40 per plant for years 2-5 with a minimum of 6,000 plants per month prepared as dry biomass with a minimum dry weight of 2 oz per plant.
And CBD $30 per plant for Year 1 and $25 per plant for Years 2-5 with FTH agreeing to purchase from the initial total amount of $300,000 in bulk paymemts of at least $100,000 per month.
Section 9 of the Service Agreement specifies it is contingent on lease agreement and Guaranty and that if service agreement is terminated, the lease agreement shall be automatically terminated as well.
CIGN Real Estste and Fluent entered into a 5 year pease agreement June 15, 2021. Copy of lease agreement attached as Exhibit B.
Under terms of Section 2 and 6, Fluent is obligated to make monthly base rent payments to CIGN Real Estate in the amount of $10,000.
Under section 6, Fluent is also obligated to pay all utilities as well as various vendors who service the facility.
Fluent was also obligated to pay a security deposit of $30,000 per Section 7 of the agreement.
Attached copy of Guranty as exhibit C dated June 9, 2021 Fluent absolutely and unconditionally guaranteed the paymemt and performance of each and every financial obligation of FTH to CIGN.
FTH failed to pay under Section 7. Material default of agreement. Under section 7 CIGN has elected to "accelerate the contract obligations" contained in Section 4 for CBD and THC plants for the remaining term of the Service Agreement.
Section 18 of Lease agreement lists what constitutes a default which includes failure to pay etc.
CIGN on Feb 18, 2022 notified FTH/Fluent of their defaults and demanded full payment.
Copy of the Notice Default os attached as Exhibit D.
Within an hour of the e-mail notifocation being sent the CEO of Fluent responded via email saying "go ahead and file suit". Through this response, Fluent clearly waived any entitlement to cure its defaults under the lease agreement. Copy of email attached as exhibit E.
Count 1 - Fraud in the Inducement
FTH/Fluent omitted from CIGN the material fact that the purpose of the service agreement was to manufacture a "harvest failure" for Defendants benefit.
The correspondence between CIGN and FTH/Fluent spanned about 2 months before entering Service Agreement and Lease agreement in June 2021. Below is a brief timeline of conversations:
March 12, 2021 - FTH contacts CIGN after a representative of CIGN posted a photograph on Instagram of himself with a bag of hemp.
April 20 - CIGN met FTH through FTH's representatives Jason Friedman, Jose Bermudez and Manuel Gil.
May 4 - CIGN and FTH exchange first draft of an agreement
Around May 13 - CIGN amd FTH discuss revisions of draft agreement.
May 18 - CIGN and FTH discuss layout of the facility.
May 27 - FTH called CIGN pushing for a signature.
June 10 - Robert Beasley, a representative of Fluent, pushed CIGN to make the deal.
Count 2 - Fraud in the Inducememt
Same as above. CIGN is saying FTH/Fluent planned a "harvest failure" all along to get out of State of Florida MMTC requirements to grow themselves which would allow them to purchase wholesale from another MMTC. Declaring a harvest failure is the only way to do that by Law.
Count 3 - Breach of Service Agreement
In violation of Section 2 of the agreement, FTH and Fluent failed to provide all THC genetics.
They failed to pay invoices CIGN sent, for the plants. The balance of these invoices exceeds 1M.
CIGN is seeking in excess of 16M owed to them.
Count 4 - Specific Performance.
They even failed to pay the utilities for the past 5 months.
Fluent also anticipatorily breached the Lease Agreement by indicating in its letter Jan 12, 2022 that it will cease making rental payments in July 2022 due to the facility not being compliant with Florida regulations. Section 3 of lease agreement clearly states it was FTH/Fluent's obligation.
FTH also expressly acknowledged that they were taking the property "as is" and that the condition of the property was not optimal. It would need upgrades.
Count 5 - Breach of Lease Agreement
Count 6 - Breach of Guaranty
Count 7 - Unjust Enrichment
CIGN conferred a benefit to FTH/Fluent through use of facility. They also benefited from their use of CIGN's labor as wepl as growing and selling CBD and THC plants.
Fluent is benefiting from declaring harvest failure with the Florida Department of Health which will allow Fluent to make wholesale purchases of cannabis products. Due to the economic advantages of making wholesale purchases over growing its own cannabis products, the harvest failure will net FTH/Fluent millions of dollars.
Count 8 - Unjust enrichment
Demand for Attorney Fees
Jury Demand for Trial by Jury.
Exhibit A - Service Agreement Jine 2021
Exhibit B - Commercial Lease Agreement June 15, 2021
Exhibit C - Paymemt Guaranty
Exhibit D - Notice of Default, Demand for Compliance, Election to Accelerate
In Section 9, Fluent agreed to be held jointly and severally liable for any monies owed to CIGN and/or CIGN Real Estate under BOTH the Service Agreement and Lease agreement.
December 31st invoice sent to them they owed
$1,288 980 for THC plants at $45 per plant.
$64,500 for CBD plants at $30 a plant
$200,125.13 for Door Locks and 200k balance due
$ 67,004.00 for Capital Expenses
Now they owe am additional $13,741,020 for the acceleration of the amounts owed for THC and $1,053,760 for CBD for a total due of $14,794,780.
E-mails attached from Pedro Guillen copied MF and Chris Viera to Viyda Schatz with Freedom Town Holdings on Aug 24, 2021 where she responded she sent a partial payment of 100k on the 1st invoice of 300k which was advance payment on 10k CBD plants at $30 per plant.
The $67,004 invoice shows it was for Generator Repair, Roof Install, Roof Poly, Electrical.
The Accelerated invoice for THC plants os for 28,644 plants at $45 per plant total $1,288,980.
Exhibit E - Email from Robert Beasley with Get Fluent to Luis Suarez, Jason Friedman and Todd Buchman FTH.
The CEO from Fluent tells them to tell Mike to go ahead and file suit. Rhey have plenty of information about his efforts to cover up lab testing which revealed the property was contaminated before he induced them into the deal. Their harvest failure is real and based on his active concealment of the contamination on the property. They will also counter for the damage to their processing equipment that hos contaminated facility caused.
