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February 22, 2024

North Grafton dispensary, CEO sued for alleged lack of repayment for $100K loan

Image | Courtesy of Google Maps Discern'd Cannabis Purveyors in Grafton

Another Central Massachusetts cannabis company is in hot water over debt, as Grafton-based dispensary Discern'd Cannabis Purveyors has been sued for allegedly failing to make payments on a $100,000 loan. 

The lawsuit, filed in Worcester County Superior Court on Friday, was brought about by JJH Investments, LLC, an entity based in Whitinsville. 

JJH said it provided Discern’d with a $100,000 commercial loan in April and provided a $20,000 advance to the company and a further $20,000 to Discern’d CEO Allan Villatoro in May 2023. However, JJH claims Discern’d breached the terms of the loan by failing to meet monthly payments, and that both advancements have gone un

JJH’s lawsuit seeks $134,000 in damages.

When reached by phone on Thursday, Villatoro told WBJ he is prioritizing making sure his employees are paid and is attempting to address the issues raised in the lawsuit.

“We are working hard to make sure we go about it the right way,” Villatoro said.

In a follow-up email, Villatoro said industry regulations and local compliance have hindered Discern’d ability to grow and market the same as other businesses.

“We’re overcoming some of those challenges, but they’ve been costly,” he said via email.  

Discern’d and Villatoro are the target of another lawsuit, filed in Worcester County Superior Court in October 2021 by Cannapreneur Partners LLC, a firm based in Westborough. This lawsuit accuses the company and Villatoro of failing to provide Cannapreneur Partners with voting securities it was allegedly promised after lending the company money. The lawsuit accuses Villatoro of corporate waste and fraud. Cannapreneur Partners’ lawsuit, which is seeking $2.7 million in damages, is still pending.

Villatoro denied that Discern'd received any funds from Cannapreneur Partners. 

"Discern’d or I never received, touched, or borrowed funds from [Cannapreneur Partners]. Whatever funds they’re claiming went directly to our former partner, not Discern’d," he said via email.

Discern’d received a special permit in Grafton in March 2021 and opened for business in March 2023.

Discern’d joins two other Central Massachusetts cannabis firms in the midst of lawsuits over debt. Greatest Hits, a cannabis business with a dispensary in Dudley, is being sued for alleged lack of payment over cannabis products purchased on the wholesale market from Harbor House, a cannabis company in Chelsea. Another cannabis business in Central Massachusetts, Cultivate in Leicester, is involved in a lawsuit against Terps, a business with dispensaries in Wellfleet and Attleboro, over alleged missed payments. 

EDITOR'S NOTE: This story has been updated from a previous version to include a statement from Allan Villatoro regarding the 2021 lawsuit filed by Cannapreneur Partners.

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