Former METRC Executive Files federal whistleblower lawsuit accusing the company of enabling illegal marijuana diversion and retaliating against him after he raised concerns about the alleged practice internally. | Cannabis Law Report | Where to buy Skittles Moonrock online

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I’ve been saying for years how dangerous a METRC monopoly will prove to be and here’s a perfect example

A lot more to come on this case and more to come across the country, I bet you your bottom dollar

Maine Wire

A former executive at Metrc, Inc., a major provider of cannabis tracking systems that is active in Maine, has filed a federal whistleblower lawsuit accusing the company of enabling illegal marijuana diversion and retaliating against him after he raised concerns about the alleged practice internally.

The lawsuit could have serious implications for Maine, where Office of Cannabis Policy Executive Director John Hudak is already facing a Government Oversight Committee investigation for his own ties to Metrc, as well as for several contracts the firm holds with the state. The probe, unanimously approved by the committee in February, centers on Hudak’s past business relationship with a Metrc executive and his role in negotiating a lucrative contract amendment between Maine regulatory office and the company.

In a 21-page complaint filed April 4 in U.S. District Court in Oregon (see below), Marcus Estes alleges that Metrc and its subsidiary Metrc ID, LLC fired him after he reported what he believed to be evidence that the company was “participating in a conspiracy” with California cannabis regulators to allow the flow of cannabis into the illicit market.

[RELATED: Maine Cannabis Chief Investigated Over Potential Conflict of Interest with METRC…]

Estes, who was hired as an executive vice president after Metrc acquired his blockchain tracking startup in 2023, claims the company’s flagship “radio-frequency identification” (RFID) tracking system fails to meet contractual obligations to flag irregularities in cannabis distribution—a core safeguard required under California law.

According to the complaint, Estes came to believe that Metrc “was essentially providing cover” for illegal distribution operations known as “burner distros,” which use legitimate licenses to buy cannabis legally and then sell it illicitly, often across state lines.

Marijuana business owners have frequently told the Maine Wire that Metrc is known within their community to be vulnerable to exploitation and subversion by illicit operators, even as regulators have presented Metrc’s services as a safeguard against black market cannabis trafficking.

“Metrc is well aware of the DCC’s failures and simply keeps quiet about them in order to maintain their plum position and their contract worth more than $40 million per year,” the complaint alleges, referencing California’s Department of Cannabis Control. Estes contends that Metrc’s system “does nothing to flag irregularities” and that the company benefits from the status quo, which is “at the expense of the cannabis industry in general.”

Estes claims he informed his supervisor at the company of these concerns in June 2023, following a meeting with a California cannabis operator who described how easily Metrc’s system could be exploited to enable diversion.

“I wouldn’t talk to anyone about this,” Estes recalls his supervisor responding, adding that “flagging irregularities ‘was not our job.’”

Following this exchange, the complaint alleges, Estes was stripped of his responsibilities, excluded from key product meetings, and ultimately terminated in March 2024—just nine days before his stock options were due to vest.

National Cannabis Firm Tied to Maine Pot Czar Faces Whistleblower Allegations, Including of Illegal Diversion

Also see

MJ Biz

Metrc allowing rampant illegal marijuana activity, former employee claims in lawsuit

Metrc’s case against him mid 2024

https://archive.org/details/gov.uscourts.flmd.428075