Business

Investment Firm Nabis Accuses Ex-Exec of Stealing Dispensary

By Willis Jacobson Oct 19, 2020
avatar
Willis Jacobson is an award-winning journalist whose career has spanned both coasts. Now based on the Central Coast of California, he has covered cannabis news and issues since 2015.
See my articles
avatar
Willis Jacobson is an award-winning journalist whose career has spanned both coasts. Now based on the Central Coast of California, he has covered cannabis news and issues since 2015.
See my articles
Share:

A former executive of a cannabis investment firm effectively stole an Arizona dispensary from the company after purporting to resign, according to a lawsuit filed by the company that is seeking to regain control.

Nabis AZ, a subsidiary of Canadian investment firm Nabis Holdings, Inc., is suing Perpetual Healthcare, Inc., a Phoenix MED dispensary, and its director Mark Krytiuk in Arizona state court. Multiple companies tied to Nabis Holdings have controlling interests over the Perpetual Healthcare dispensary, according to the suit, and Nabis AZ had entered into a contract to manage the dispensary. The suit accuses Krytiuk of unlawfully interfering with those agreements by not relinquishing his control over the dispensary, which has the Nabis properties on the brink of collapse.

Perpetual Healthcare, the suit notes, is the only money-making enterprise in Nabis Holdings’ portfolio. Nabis Holdings has an $8.1M debt payment due on Oct. 25, as part of a refinancing plan, and will be unable to make that payment due to Krytiuk’s alleged misconduct, the suit states. 

“As a result, Nabis Holdings will lose its only income-generating asset, Perpetual, along with control over its wholly owned subsidiary, Nabis AZ,” the suit reads. “Krytiuk is aware of the refinancing negotiations but continues to refuse to return control over to Perpetual and the dispensary, jeopardizing the Nabis Holdings’ refinancing plans and Nabis AZ’s ability to continue its business operations.”

Krytiuk, according to the suit, is a former president and COO of Nabis Holdings who was appointed by the company as director of Perpetual Healthcare and one of two managers of Nabis AZ due to his position with Nabis Holdings.

Nabis AZ paid PNMT Management Services about $15M in August 2019 for an exclusive management contract over Perpetual Healthcare, according to the suit. About $8M of that total was financed through a promissory note on a loan agreement with PNMT Management Services.

The only stake Krytuik held in those deals was to manage the business on behalf of Nabis Holdings, according to the suit.

The suit states that Krytiuk’s relationship with Nabis Holdings and Nabis AZ began to deteriorate this past June. Because of the souring of the relationship, Nabis Holdings and Nabis AZ “determined that it was necessary to remove Krytiuk from his role at Perpetual” if he refused to step down from Nabis Holdings. “Otherwise, Krytiuk could effectively steal Nabis Holdings’ principal asset and control over Perpetual and the dispensary,” reads the suit. 

In September, Krytiuk was removed as chair of the Nabis Holdings board of directors and “purported” to resign as COO and president of Nabis Holdings, the suit states. It does not give a specific reason for Krytiuk’s ouster.

Since then, the suit alleges that Krytiuk has refused to transfer control over Perpetual Healthcare, “notwithstanding that his involvement with Perpetual was exclusively the consequence of his role” as an executive of Nabis Holdings.

The lawsuit claims that Krytiuk wrongly maintains he has a personal interest in Perpetual Healthcare.

The plaintiffs are asking the court to uphold Nabis AZ’s exclusive management agreement with Perpetual Healthcare and to declare that Krytiuk has no interest in the business. It further asks the court to stop Krytiuk from operating or receiving income from Perpetual Healthcare, and to force Krytiuk to transfer his duties with Perpetual Healthcare to an officer appointed by Nabis Holdings.

“Nabis AZ does not have any adequate remedy at law or otherwise to protect itself from the immediate and irreparable harm,” the filing states.

Nabis announced Friday that it was also suing Krytiuk in the Ontario Superior Court of Justice in Canada. That lawsuit seeks the same damages as the one in Arizona state court.

“Until such time as a new director of Perpetual acceptable to Nabis is appointed, the Company has no ability to influence the business and affairs of Perpetual,” Nabis Holdings said in a statement.

Nabis AZ is represented in the Arizona case by Jeff Matura, of Barrett Matura. He did not immediately respond Monday to a message seeking comment.

Krytiuk’s Arizona counsel was not immediately clear Monday, nor was either side’s counsel in the Canadian case.

A note from the editor

Since 2015, WeedWeek has been the best way to keep up with the cannabis industry. WeedWeek’s audience includes many of the most influential figures in cannabis because we are editorially independent:
Advertisers have no influence on our editorial content.

In addition to daily original reporting and analysis, we publish two free newsletters: 1) WeedWeek by founder Alex Halperin, 2) WeedWeek California by Donnell Alexander.

The flagship WeedWeek newsletter has more than 8,000 subscribers and a weekly open rate above 25%.

Follow us on Google News, and be the first to see new WeedWeek stories.

Connect with WeedWeek on Twitter, YouTube, Instagram, and LinkedIn.

Tips, comments and complaints to Alex Halperin alex@weedweek.net

To advertise contact Lisa Marie Dudenhoeffer lisamarie@weedweek.net