Terra Tech Corp., the California-based company behind Blüm dispensary in Midtown Reno, paid $6.3 million in February to settle a lawsuit from local co-owner Heidi Loeb Hegerich. The agreement, disclosed in the company's U.S. Securities and Exchange Commission filings, resolves claims of fraud and profit skimming but admits no liability. This outcome highlights tensions in Nevada's fast-growing cannabis sector, where partnerships formed ahead of recreational legalization now face legal reckoning.
Lawsuit Alleges Profit Diversion to Struggling Ventures
Heidi Loeb Hegerich filed suit in November, accusing Terra Tech partners of exploiting her and diverting millions from Blüm's earnings to underperforming company projects. The complaint listed 50 counts, including fraud, conspiracy, and elder abuse. Terra Tech rejected every allegation. Blüm's Reno location opened in January 2017, months before Nevada legalized recreational marijuana sales, positioning it among early entrants in a market that generated over $1 billion in state tax revenue by 2018 from adult-use sales alone.
Settlement Closes Chapter for Philanthropist Investor
Loeb Hegerich's attorney, Mark Simons, stated Wednesday that his client feels relieved to move forward. A grandmother, philanthropist, and widow of developer David Loeb, she initially invested in cannabis to support Nevada's education funding, as a portion of state cannabis taxes funds schools. Simons added that she now plans to direct settlement proceeds toward direct community aid, ruling out further marijuana industry involvement. The deal requires transferring her ownership license to Terra Tech for completion; her name persists in the state's May 1 marijuana ownership database.
Personal Fallout and Broader Industry Strains
The suit also targeted Mikel Alvarez, Loeb Hegerich's former personal assistant of 15 years, for allegedly taking money and belongings. Alvarez, who departed in May for the gaming sector, expressed no resentment despite the rift. "The relationship is over completely," he told the Reno Gazette Journal. Terra Tech's SEC report emphasized the settlement as a non-admission of fault. Such disputes reflect challenges in Nevada's cannabis industry, launched with medical sales in 2014 and expanded recreationally in 2017, where rapid scaling often strains founder-investor ties amid volatile profits and regulatory demands.
