Pubdate: Thu, 14 Jul 2011 Source: Portland Daily Sun (ME) Copyright: 2011 The Portland Daily Sun Contact: http://portlanddailysun.me/ Details: http://www.mapinc.org/media/5257 Author: Casey Conley Bookmark: http://mapinc.org/topic/Dispensaries NORTHEAST PATIENTS GROUP TARGET OF LAWSUIT Northeast Patients Group, which holds permits to open medical marijuana dispensaries in Portland, Bangor and elsewhere in Maine, is being sued by its former financial backer in California. In court filings, Berkeley Patients Group alleges Augusta-based Northeast Patients Group failed to pay back more than $630,000 in loans used for salaries and start-up funds during the successful 2010 permitting process. Northeast's chief executive Becky DeKeuster is also named in the lawsuit, which was filed July 6 in Cumberland County Superior Court. DeKeuster, who severed ties with Berkeley in February, is accused of breach of contract, breach of fiduciary duty and disclosing trade secrets to a competitor. She declined to be interviewed yesterday. Dan Walker, an attorney with Preti Flaherty, said in a written statement that Northeast and DeKeuster disputed Berkeley's version of events. Walker said he would file a counterclaim soon. Meanwhile, he added that Northeast expected to "have necessary funding and support to open (its) dispensaries in the very near term." Berkeley officials also declined to comment on the lawsuit. DeKeuster, a former educator, began working for Berkeley in 2004. She was later named a director of company, which operates one of the largest dispensaries in Berkeley. She was still working for Berkeley when she moved to Maine, sometime after the successful 2009 referendum that allowed medical marijuana dispensaries to open, according to court documents. Her title in Maine was "New England Expansion Director" for Berkeley. DeKeuster was paid up to $125,000 per year by the California firm to oversee the medical marijuana permitting process in Maine. During that time, Berkeley says it provided Northeast with more than $632,000 in loans. According to court filings, the company expected it would partner with Northeast if dispensary permits were awarded by the state. Even so, it isn't clear if the two sides signed any formal partnership, other than DeKeuster's employment contract. That contract stipulates that her role in Maine was to work "for the benefit of [BPG]" and not "engage in any practice that competes with [BPG's] interest]." In 2010, Northeast received permits to open four medical marijuana dispensaries: one in Portland, Bangor, the Augusta area and along the Midcoast. Like all dispensary operators in Maine, Northeast is a nonprofit. However, DeKeuster left Berkeley in late February, before any of Northeast's dispensaries had opened. In court filings, Berkeley claims she quit immediately prior to signing a letter of intent with Mobley Pain Management and Wellness Center, which Berkeley considers a competitor. Mobley Pain Management is led by a former NBA player Cuttino Mobley, who is also affiliated with Summit Compassion Center, a dispensary planned for Warwick, R.I. Mobley played college basketball at University of Rhode Island and also attended Maine Central Institute in Pittsfield. Mobley's group planned to loan Northeast $2 million to get its Maine dispensaries up and running. Terms outlined in the letter of intent show Mobley would provide that funding in several increments, to be paid back over seven years at 18 percent interest. Northeast was also to receive a $100,000 bridge loan from Mobley once the letter of intent was signed. According to the lawsuit, DeKeuster never told Berkeley officials about her discussions with Mobley - which Berkeley says occurred while she was still on their payroll. For that, she is accused of breach of contract. "Suffice it to say that we and our clients have a much different view of the underlying facts and are prepared to present our case and counterclaims in court," said Walker, the attorney for Northeast. The lawsuit is the latest in a series of setbacks for Northeast, which is the only permit holder that hasn't opened its dispensary. To date, facilities have opened in Biddeford, Ellsworth, Frenchville and Auburn. Aside from financial issues, Northeast has run into zoning troubles in several Maine communities. Catherine Cobb, director of Licensing & Regulatory Services in the state Department of Health and Human Services, told the Bangor Daily News that Northeast was finalizing an arrangement with Mobley's group. Meanwhile, Northeast is already growing medical marijuana at a facility in Thomaston. Once it secures new funding, the firm's dispensaries should open soon afterward, Cobb said. "I am supposed to receive final term sheet on their permanent financing this week," said Cobb. "I anticipate that after that they will be able to settle any issue they have with Berkeley." Cobb says she doesn't believe the lawsuit will result in further delays for Northeast's dispensaries. According to paperwork filed with the state, Northeast expects to draw nearly 250 patients in Portland during its first full year in operation, which it says would yield more than $1.7 million in revenues. In year two, the company expects to have more than 400 patients and earn more than $3.2 million. In a recent interview, DeKeuster said she is still looking at locations for Northeast's Portland dispensary, which she said should be open this fall. Northeast has reportedly leased space at 959 Congress Street, at the intersection with St. John Street, although DeKeuster wouldn't confirm that. - --- MAP posted-by: Jay Bergstrom