A legal battle ensued after the $8 million sale of A Cut Above, a dispensary on Denver's South Broadway, in 2022. The buyer, Colorado Holdings, headed by Jordan Lipton, refused to pay the remaining $2.2 million, claiming fraud by the seller, Hobby Farms, owned by Phil Gist.
Lipton alleged that Gist misrepresented A Cut Above's financial performance by including figures from a separate cultivation site not included in the sale, concealing declining revenue. Text messages between Lipton and Gist were presented as evidence, showing initially impressive revenue figures later revealed to be misleading.
Arbitration sided with Gist, determining Lipton knew what he was buying and failed to prove fraud. Judge Elizabeth Starrs upheld the arbitration, ordering Colorado Holdings to pay $2.2 million plus interest and fees. Lipton's subsequent attempt to overturn the ruling in Denver District Court is ongoing.
Lipton claims the arbitration displayed bias, alleging his lawyer hasn't witnessed such disregard for the rule of law in nearly 20 years. The case highlights the complexities and potential pitfalls of high-value transactions in the cannabis industry. Both legal teams declined to comment.