A Reno marijuana dispensary sits at the heart of a lawsuit alleging multimillion-dollar fraud by its California-based owners. Heidi Loeb Hegerich, co-owner of the Midtown Blüm location, claims her business partners at Terra Tech Corp. diverted profits to prop up failing ventures. The late November filing in Washoe District Court levels 50 claims, including fraud, conspiracy, and elder abuse, exposing tensions in Nevada's fast-growing cannabis sector.
Betrayal of Trust in a Booming Industry
Heidi Loeb Hegerich, a philanthropist and widow of developer David Loeb, joined forces with Terra Tech executives to launch Blüm's Reno outlet in January 2017, months before Nevada legalized recreational marijuana sales. She invested partly because state cannabis taxes fund schools, aligning with her priorities as a grandmother. The lawsuit asserts that Terra Tech, a publicly traded company from Newport Beach, California, exploited Blüm Reno's success by siphoning funds to underperforming operations, while dodging rent payments and fabricating loans she never received.
Financial Irregularities and Corporate Response
Attorneys cite Terra Tech's own May quarterly report, which admitted "deficient" and "incomplete" internal financial controls. Loeb Hegerich alleges executives misled her about external audits, revealing instead an inexperienced internal finance team. Her lawyer, Mark Simons, described the fallout: "It’s devastated every aspect of her life, and some of it is the realization that the people she trusted most betrayed her confidence."
Terra Tech dismissed the suit as "meritless" in a Tuesday press release, portraying Loeb Hegerich as a "wealthy, sophisticated investor with a history of disputes." The company highlighted harm to its 120,000-plus shareholders, whose NASDAQ stock plunged over 23 percent that afternoon amid the news.
Personal Assistants Implicated in Alleged Scheme
The complaint also targets Mikel Alvarez, Loeb Hegerich's former personal assistant, and his husband Garrett Alvarez. Mikel, initially tapped to manage the Reno site, shifted to oversee all Terra Tech dispensaries and allegedly redirected Reno profits. Alvarez responded via text: "On behalf of the Alvarez Family Trust, Garrett Alvarez and myself, on the advice of counsel, we have no comment on this matter."
Broader Lessons for Cannabis Business
Simons cautioned that such misconduct mirrors problems in any sector, amplified by cannabis's rapid expansion. Nevada's recreational market, legalized in 2017, has drawn opportunists alongside legitimate operators, testing oversight in a federally restricted industry. The case's outcome remains uncertain, and while it might prompt Loeb Hegerich to exit cannabis, Simons emphasized its roots in timeless business pitfalls rather than the plant itself.
