Shocking Scandal: Alderman Exposed in Cannabis Investment Fraud!
Several investors and a Colorado firm are alleging they are victims of a scheme to strip them of funds and ownership stakes in a St. Louis cannabis venture.
One of their targets: newly re-elected St. Louis Alderman Bret Narayan.
A lawsuit filed Friday in St. Louis County Circuit Court alleges that Narayan and his brother, Rahm, "tricked" two Colorado cannabis investors into contributing their money and expertise into a Missouri cannabis operation created by the Narayans, Occidental Group Inc., "over which the Narayans schemed, with the other defendants, to wrest full control."
The suit accuses the Narayans of fraud, breach of contract and violating securities and other laws. It seeks unspecified damages, plus rulings that the investors have right to 49.8% of the local venture.
Bret Narayan, in a text message Monday, said he was just seeing the suit. "I will review with counsel and be in touch," he said. Narayan later said that the allegations are "outlandish and without merit."
"I will be putting forward a vigorous defense and counterclaims," he said.
An attorney, Bret Narayan makes no mention of cannabis businesses in his biography on his website. In 2021, he sponsored legislation that became law legalizing small amounts of marijuana in the city. That came after Missouri launched its medical marijuana program, but before state voters legalized recreational cannabis use in 2022. An ally of progressive Aldermanic President Megan Green, Narayan in April won re-election for a ward that includes the Dogtown area, Clifton Heights, Lindenwood Park and other neighborhoods, defeating another incumbent, Joe Vaccaro. Narayan was first elected in 2019.
The lawsuit is from Colorado residents Brian Ruden, Naser Joudeh and their firm, Star Brands LLC.
It says that once Missouri voters in 2018 voted to set up the medical marijuana program, Bret and Rahm Narayan decided to apply for licenses to enter the business but that they lacked the capital and experience to finance and operate one.
They convinced "experienced investors and operators" Ruden and Joudeh, principals in companies operating under "Star Buds" names, owned by Star Brands, to go into business with them, the lawsuit states.
The deal stipulated that Ruden and Joudeh would contribute capital totaling 49% of the amount necessary to establish the local cannabis business, which was to carry the Star Buds name, according to the suit. In exchange, it claims the Colorado investors were to get a 49% interest in the retail firm.
The investors say they contributed $324,000 to Occidental Group and also $400,000 to a related company, 75Olive LLC, which was to purchase real estate where one of two cannabis dispensaries would operate.
In the lawsuit, they say they also provided a $200,000 loan to Occidental Group for inventory, plus intellectual property, technology, management, branding supplies and employees.
Other plaintiffs in the lawsuit — Edward Throop and Ron Lincoln — also contributed 20% of capital, the suit states. Together with the 49% from Ruden and Joudeh, they contributed 70% of the Occidental Group capital, it says.
