A new lawsuit alleges California delivery app Eaze uses wire and bank fraud to process credit and debit card payments.

The suit was filed by Canadian firm DionyMed on behalf of its American subsitiary Herban Industries which has a competing platform called Chill. Eaze called the allegations “false” and said the suit was an attempt to generate business for Chill and prop up its parent company’s stock price.

  • The suit claims Eaze processes payments through European shell companies disguising them as legal goods, which gives Eaze an edge in the market.
  • It asks for an injunction forcing Eaze to abandon the practices.
  • Eaze says the retail partners for whom it facilitates transactions handle payment processing.
  • San Francisco attorney (and WeedWeek Council member) Katy Young said the suit is “dangerous” for the industry.
  • “There’s going to be wide-reaching repercussions, where a lot of [Eaze’s partners] records that are not involved in the fight between Eaze and DionyMed, they’re all going to get dragged in,” through the discovery process, Young said.

Quick Hit

  1. In a press release, MedMen crowed that a lawsuit filed against it by early investors has been dropped. The L.A.-based retailer still faces a lawsuit filed by its former CFO and a class action suit filed by former employees over its labor practices.
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