Former Steep Hill Labs CEO and Chairman Jmichaele Keller is suing the company and its investors to block the sale of certain assets to competitor EVIO, Inc., alleging that the transaction would “dismantle Steep Hill and strip shareholders of value,” according to a press release issued by PryorCashman LLP, a Los Angeles-based law firm representing Keller.

The deal “includes a series of internal transactions that would dilute existing shareholders from 100% of Steep Hill’s equity down to just 4%,” Keller’s attorney, PryorCashman’s Thomas Vidal, said in a public statement.

Keller initially filed the suit earlier this year in San Francisco Superior court, accusing Steep Hill and various stakeholders—including Merida Capital Partners, Mitch Bryan Baruchowitz, Jeffrey Monat, Gotham Green, Richard Jacinto II, Stephen Joseph Finfer, Randy Slifka, Jane Wright-Mitchell and Dr. Andrew Rosenstein—of abuse of fiduciary duty, abuse of control, corporate waste, fraud and concealment, misrepresentation of stock ownership and proxy voting, and more.

Keller alleges that Steep Hill’s board and management “ran the company into the ground” and “squandered between $75 million and $200 million of shareholder value” after ousting him from the company in August 2018, according to PryorCashman’s announcement.

Keller’s complaint and the subsequent PryorCashman press release made public the previously confidential details of the transaction between Steep Hill and EVIO, according to a press release issued by Steep Hill this week.

Under the deal, Steep Hill plans to sell its genetics-related intellectual property and genetics team to EVIO, and Keller’s lawsuit alleges that he was terminated because he resisted “efforts by a ‘cabal’ of investors seeking to enrich themselves at the expense of shareholders,” according to PryorCashman’s release.

“It is the company’s position that the claims laid out in the complaint are without merit and appear to be motivated by Keller’s attempts to blame innocent shareholders for enforcing their rights and attempting to seek recovery for his alleged malfeasance, breaches of shareholder trust and other actions as detailed in the company’s arbitration complaint,“ Jeff Monat, Chairman of the Board of Steep Hill, said in a public statement.

Steep Hill has an ongoing lawsuit against Keller and his management company, Delft Blue Horizons, for corporate malfeasance, among other allegations, which was filed in January 2019.

Both parties are awaiting their lawsuits to be heard, and as Steep Hill prepares its arguments, it is considering seeking restitution from PryorCashman, as well as the disqualification of the law firm as Keller’s counsel.

California-based Success Centers launched roughly 40 years ago to assist youth released from detention centers with life skills and employment. Now, the organization has expanded to the cannabis industry, where it helps connect employers with qualified job seekers in the Bay Area with a focus on social equity.

Success Centers assists job seekers in multiple industries, from construction to the arts, and hosts Employer Spotlight hiring events to connect employers with job seekers. To serve the cannabis industry specifically, Equity for Industry Program Manager Angela White has created the Budding Industry Job Shop, where several employers give presentations about their companies and what a day in the job looks like.

“We’ll have the job description pulled up, and what’s different is we’ll have questions from the audience of job seekers,” White says. “We want to have a good retention rate. We don’t only want people hired at these companies, but we want them to feel comfortable and safe and … to be a good fit there.”

Following the events, employers interview potential candidates, and Success Centers is an active participant in the process, ensuring job seekers have all the necessary resources.

Under San Francisco’s Equity Program, cannabis dispensaries must staff 35% of their operations with social equity applicants, and Success Centers works specifically with these companies to connect them with verified candidates.

The organization also assists social equity applicants who are trying to launch their own businesses through its Equity for Industry Workshops, which connect entrepreneurs with cannabis industry professionals who can help them set their plans in motion.

“If you’re affected by the war on drugs, that means you didn’t go to college—a lot of folks didn’t—your family was separated and you don’t know a lot of the business acumen,” White says. “We bring in industry professionals to teach [entrepreneurs] about the different aspects of the business. We have all kinds of workshops [covering topics such as] how to understand contracts, understanding nondisclosure agreements, managing a cash-only business [and] insurance.”

Success Centers recently hosted a workshop on extraction, as well as a presentation on California’s track-and-trace system.

Since the onset of the COVID-19 pandemic, many of the organization’s events have shifted to the virtual space, and White says she has seen an increase in out-of-state participants.

“I have people from Georgia joining in and Alabama because they want to know about this industry,” she says. “As the industry becomes legal across the country, … the equity community is all over, and we want them to be ready and understand … how they can get their foot in the door.”

Another aspect of Success Centers’ budtender education focuses on the terminology of the legal cannabis industry. Job seekers learn about terpenes, for example, and how to talk with customers and patients about terpene content.

“Some of the dispensaries, they’ll have these three qualifying questions when people go to apply,” White says. “If you don’t know those terms, … you’re denied right away, so I wanted to eliminate that. Learning the lingo is very important for folks from our community.”

Success Centers has partnered with Eminent Consulting in Oregon to provide a budtender training course that teaches the science behind budtending, and the organization offers a scholarship to help with the cost associated with the program.

Photo courtesy of Success Centers

To help teach job seekers and entrepreneurs the fundamentals of business, Success Centers also collaborates with Oaksterdam University.

“We have a cannabis scholarship for folks that want to learn the business side, and they learn everything from how to purchase the plant to how much moisture should be in it to how to lay out their building,” White says. “They cover all of that in their seminars, and they also have an exam … at the end so they can get their certificate for completing the program.”

Oaksterdam University also offers a 14-week horticulture class that teaches the fundamentals of indoor and outdoor cannabis cultivation, from lighting to pH levels.

“It’s a wonderful program, and we’re happy to be partnered with them,” White says. “They understand what it means to our community to have this opportunity, so I really appreciate the team at Oaksterdam University.”

Although Success Centers’ cannabis programming is still fairly new (White says the program launched roughly two and a half years ago), it has already celebrated its first award-winning budtender. William Brown, one of the first cannabis clients White ever worked with, was named the 2019 Budtender of the Year for his work at Harborside’s Oakland dispensary.

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“I’m really excited about that,” White says. “It’s been an awesome journey, having someone actually win something like this. … When he got his trophy, it was so funny—I drove to meet him over in Oakland, and he had his trophy with him, and I was smiling harder than he was. I felt like I won the trophy.”

In order to reach more people, Success Centers recently launched a pilot program called Entrepreneurship in a Nutshell, which supports those looking to launch businesses in the industry.

“It gets people in the entrepreneurship mindset, and it helps them work with business models [and] put their ideas together so that they’re ready to start a business at the end of that,” White says. “They win prizes and have an opportunity to get out and pitch their business in front of investors. We just keep trying to grow the program, growing people who want to participate and work.”

Looking ahead, White would like to create a mentorship program where entrepreneurs have the opportunity to discuss their business plans with industry professionals, who can then offer their experiences and guidance.

“We’re just really excited about the future of this industry,” White says. “It’s a rough journey, and we want to be here to make sure our folks are getting in. We would love to move this across the nation, building a model for how things should be done."