Money is like any drug: first comes the high, then comes the crash. Last year, the iGrow hydroponics store in Oakland owned by Dhar Mann courted the media and Bay Area residents alike with the story of the “first out-of-the-closet marijuana hydroponics store.” Mann had big plans. His company started a college called UniCann. They launched a franchise WeGrow. But last week four small claims suits were filed against the Oakland company and its principles in what appears to be the first salvo in a series of legal actions this winter from a former partner, employees, and contractors.
On Tuesday, February 22, Your Girl Friday Interiors filed a small claims action against WeGrow Oakland LLC in Alameda County for unspecified unpaid design services.
WeGrow owner Mann said he didn't know why Your Girl Friday would have filed a claim.
WeGrow co-owner Derek Peterson split with Mann in December and filed a small claims action February 22 against Joty Nagra, WeGrow's bookkeeper. Peterson has also filed a small claims case against WeGrow employee Tony Alvarez for $3,000 and WeGrow manager Justin Jorgensen.
Peterson said the small claims are a prelude to a $50,000 claim against Mann for unpaid hydroponics inventory WeGrow sold last year. Peterson said he intends to file the suit in Alameda County Superior Court this week.
Regarding his split with Peterson, Mann first told Legalization Nation that everything was fine, but after repeated questioning admitted: “There have been disagreements. As far as what the outcomes will be, I'm not exactly sure right now.”
“WeGrow does pay its bills. These are contractual disputes that happen with any business,” Mann said.
Mann said WeGrow has suffered growing pains in its quick pivot from its roots as a hydroponic supply store and college, then a franchiser and wholesale hydroponics supplier. They also intend to bid on permits for an Oakland pot farm and/or dispensary, should one become available.
Peterson — a competitor for such a permit — said even though WeGrow is opening its first franchise in Sacramento and plans to move into Arizona and New Jersey, WeGrow in Oakland cannot keep its doors open and has a history of underpaying or not paying employees and contractors. Peterson said the company has been running at a loss. He sent copies of internal WeGrow emails to Legalization Nation that appear to show WeGrow lost $35,000 in the first ten months of 2010.
There are other complaints as well. Don Marshall, co-owner of Harry Clark Plumbing and Heating in Oakland, said his lawyer is filing a lien on the WeGrow property off of I-880 in response to Mann's underpayment on air conditioning work last year. “Underneath all the headlines there is some bullshit,” he said. “This guy knew what he was doing and he had no intention of paying us. By the time lawsuit is over it will cost me more to get him to pay us than it will be to do the job, but I'll go all the way.”
Mann said Marshall sent him an invoice for $30,000 on a job that was estimated at $20,000, so he only paid the $20,000. “We paid him in full,” Mann said.
“That's not true,” Marshall said. “There were no change orders.” Marshall is searching for Mann's real address to serve him the lien papers, he said.
Twenty-year-old Oakland resident and former WeGrow cashier Daizha Valere said Mann hired her in August at $10 per hour, consistently paid late, when he paid at all, and shorted her paychecks to $8 per hour. WeGrow also withheld payroll taxes, and then issued her a W-2 stating that WeGrow had not withheld taxes, she said.
Mann said Valere might have been underpaid.
Valere said she’s heading to the Oakland office of the California Labor Commissioner with her pay stubs on March 1. Valere now works for Peterson where she says working conditions have improved immensely compared to WeGrow's operation.
“It was just a mess, I don't even know where to start. It was a complete mess. Bills weren't getting paid. People were constantly coming in and harassing us for money. Mostly it was just people coming in and saying we did $12,000 worth of work on this building and haven't gotten paid,” she said.
The latest claims follow a months-long series of challenges for Mann, a former mortgage broker in Davis during the housing bubble, who is the son of a wealthy, politically connected Oakland family that owns multiple cab companies and real estate properties.
When iGrow launched, marijuana-shy hydroponics wholesalers canceled iGrow's accounts and the store's shelves went bare. Reviews on Yelp savaged the concern. Long-time drug law reformers bristled at Mann's brash approach and Cannabis Warrior.com's Mickey Martin called him the “Bullshitter of the Week” in September.
Still the press lapped up iGrow's press release, and The Atlantic Magazine even featured on its web site promotional material for Mann's plan to win a mega-pot farm permit in Oakland. Pressure from the federal government has since stalled Oakland's permitting process.
Note: Mann has at least twice offered this reporter jobs in the past, and this reporter has turned him down.Correction: An earlier version of this post erroneously listed the wrong author. It was reported and written by David Downs.