Heidi Loeb Hegerich, co-owner of the Reno-based Blüm marijuana dispensary, has filed a lawsuit alleging her business partners at Terra Tech Corp. diverted millions in profits to prop up the company's struggling ventures. The late November complaint in Washoe District Court levels 50 claims, including fraud, conspiracy, and elder abuse, against the California-based firm that owns the Blüm chain. Terra Tech dismissed the suit as meritless, but its NASDAQ stock plunged over 23 percent on Tuesday amid the fallout.
Allegations Center on Profit Diversion and Financial Mismanagement
Loeb Hegerich claims Terra Tech executives exploited her trust by siphoning funds from the profitable Reno location, opened in January 2017 just before Nevada legalized recreational marijuana sales. The lawsuit argues these profits supported Terra Tech's other operations, some faltering, without her consent. It further accuses the company of dodging rent payments owed to her and fabricating loans she never received.
Her attorney, Mark Simons, described the betrayal as life-devastating, eroding the confidence she placed in those closest to the business. Terra Tech's own May quarterly report admitted deficient and incomplete internal financial controls, a point the suit highlights. Loeb Hegerich later learned that promised external audits were absent, replaced by reviews from an inexperienced internal finance team.
Personal Ties Complicate the Legal Battle
The case 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 allegedly aided in reallocating Reno funds, per the complaint. Alvarez declined comment Tuesday via text, citing legal advice, on behalf of himself, Garrett, and their family trust.
Loeb Hegerich, a philanthropist and widow of developer David Loeb, entered the venture partly because Nevada directs marijuana tax revenue to schools—a draw for her as a grandmother. Terra Tech, publicly traded out of Newport Beach, operates Blüm outlets in Reno, Las Vegas, and California, capitalizing on the post-legalization boom.
Broader Risks in a Fast-Growing Industry
Terra Tech countered in a Tuesday press release, portraying Loeb Hegerich as a sophisticated investor with a record of partner disputes and claiming her accusations harm 120,000 shareholders. Simons emphasized that such misconduct mirrors issues in any sector, but Nevada's cannabis market moves at breakneck speed, attracting inexperienced players and unvetted operators. The dispute underscores vulnerabilities in an industry still maturing amid legalization, where rapid expansion can mask financial irregularities and erode investor safeguards.
