Dutchie Co-Founders File Lawsuit Against Company’s Current Leadership

The co-founders of Bend, Oregon-based cannabis tech company Dutchie — who the company said stepped down earlier this month — have filed a lawsuit in Delaware’s Chancery Court claiming they were wrongfully forced out of the company, Law360 reports.

The suit targets Dutchie’s current Executive Chairman Timothy Barash and the following four board directors: Karan Wadhera, Wilder Ramsey, Gaurav Ahuja, and Thomas Linovitz. The plaintiffs, brothers Ross and Zachary Lipson, claim they were victims of a “blatant ambush” during a November 28 board meeting where the board passed pre-drafted resolutions terminating them both “for cause.” The suit also describes a vote to remove the co-founders from the board, strip them of their key stakeholder status, and amend the company’s voting agreement language to enable Barash to become CEO.

The Lipsons are asking the court to declare that their removal and the board’s actions on November 28 were invalid, that Ross Lipson is still a director and the company’s CEO, and that Zachary Lison is still a director and the company’s chief product officer.

Earlier this month, Dutchie said in a press release announcing the Lipsons’ departure that, “Ross and Zach Lipson have departed the company after a long tenure of driving growth, passion, and innovation in the cannabis industry.”

Dutchie claims to be the largest e-commerce company in the world for dispensaries with services including point-of-sale, e-commerce, payments, and insurance software specialized for the cannabis industry. The company has more than 5,000 dispensary partners and processes in excess of $14 billion in annual cannabis sales, the report said.

Dutchie was founded in 2017 and reportedly held a total valuation of $3.75 billion by the end of 2021.