A Burlington man is suing a CBD oil distributor in Lake Lure that he claims defaulted on a $300,000 loan.
CBD oil is derived from cannabidiol, a compound in marijuana that doesn’t produce a high but which some consumers believe to be beneficial in treating anxiety, insomnia, post-traumatic stress disorder, seizures, and chronic pain.
Thomas S. Holderby filed a lawsuit in Alamance County civil superior court last week against LL Hemp Investments at 683 McDaniel Road, Lake Lure, to recover an outstanding balance of $250,000 on a $300,000 short-term loan that he claims to have made to the company in February 2019. The note came due on August 22, 2019, according to the court file. [The court file gives Holderby’s address as being in the care of his lawyer, Benjamin J. Rafte of Greensboro; other official documents on file with the state list his address as 4143 Blackwater Court, Burlington.]
In his suit, Holderby alleges that LL Hemp Investments paid $50,000 toward the principal of the note around October 17, 2019 but has yet to pay the remaining balance.
A copy of the promissory note that is included in the court file stated that Holderby loaned the money to LL Hemp Investments to purchase “certain agricultural crops to process for producing CBD oil to be sold.”
Documents on file with the Secretary of State’s office describe LL Hemp Investments as a retail and wholesale CBD oil company that was established in 2018 and has two managing members, Michael B. Harris and Shane E. Wilson of Lake Lure.
The company sells topical CBD oil, lotion, and salves, which are produced by LL Hemp Farm in Lake Lure, through its online storefront, Lake Lure CBD, according to the company’s website.
The terms of repayment on the loan stated that “in the event the crops or the oil are sold by the borrower for $480,000 or more, then, in addition to repaying the principal…Hemp Investments” would be required to pay Holderby $150,000 in interest on the date that the note came due, according to the court file. The terms also called for LL Hemp Investments to pay a $30,000 referral fee Matthew G. Mitchell in the event of such a sale; though Mitchell signed the note, neither his title nor role in the loan process is listed on documents in the court file.
Holderby is seeking recovery of the alleged outstanding balance on the loan, plus his costs for collection, court costs, and attorney’s fees under two alleged causes of action, breach of the note and unjust enrichment.
The court file gives no indication that LL Hemp Investments had been served with or filed a response to the lawsuit by press time Wednesday. While the coronavirus has prompted a moratorium on hearings in most civil and criminal cases until after April 16, an assistant clerk of court confirmed for The Alamance News this week that the 30-day deadline in which to file a response remains in effect unless an extension is granted.