A Southern Oregon farm wants millions of dollars from a group of businesses and individuals who allegedly pitched themselves as a “co-op” of hemp harvesters and processors, but left the farm high and dry days after being paid six figures.
Jefferson State Farms of Medford, owned by Ben and Kathleen Yuma, is suing four individuals and three businesses that the Yumas met through social media for more than $11 million.
The Yumas are claiming that the businesses never so much as started harvesting the farm’s crop of 112,500 hemp plants last fall — despite making six-figures in deposits, according to a lawsuit filed Wednesday in Jackson County Circuit Court.
The lawsuit makes civil fraud, unlawful trade practices and breach of contract allegations against businesses identified as Palex Enterprises, Hemp Warehouse and Great Horizons LLC and four individuals because the Yumas’ farm paid them a $136,000 down payment for the crop’s schedule Oct. 9 harvest start date, yet they never returned $86,000 of the money the farm paid — despite at least two handwritten promises to do so.
When the Yumas tried to collect the money they paid, one of the attempts turned physical at a warehouse in White City, the lawsuit says.
The lawsuit provides a look at the challenges one Southern Oregon hemp grower faced during the region’s difficult first season farming the low-THC, high-CBD crop. According to earlier Mail Tribune reports, numerous hemp growers struggled with early frosts, bug infestations, mold and a lack of local processing facilities — not to mention a looming threat of national regulation changes.
The Yumas’ alleged ordeal started Sept. 30, when Jefferson State Farms inquired about harvesting and drying on Meetup.com’s “Southern Oregon Hemp Co-op” group.
Later that day, the Yumas met with the Meetup group’s administrator, identified in the suit as Robbie Lesa Horton, at a White City warehouse owned by Hemp Warehouse and Palex Enterprises. Horton introduced the Yumas to her business partner, named in the lawsuit as Hong Morales.
Morales quoted the Yumas a fee of more than half a million dollars to harvest the crop with equipment such as a combine harvester and a mobile industrial hemp dryer. By the end of the week, Jefferson State Farms had signed a letter of intent and paid them the first of two $68,000 deposits for the work.
The following Monday, defendants in the lawsuit identified as Robert Mansur and Stormmy Paul arrived at Jefferson State Farms to inspect the crop and discuss logistics.
“Defendants Mansur and Paul emphasized the mechanical benefits of their harvesting and mobile drying equipment, and promised that their machinery could harvest and dry thousands of pounds of crops per hour,” the lawsuit states. “Defendant Paul came back the following day to collect a second $68,000 deposit on the harvesting services, which [the Yumas] paid in cash.”
Two days later on the agreed-upon start date, no one showed at the farm.
When the Yumas called Morales, the lawsuit claims she told the farm’s owners that $100,000 of the Yumas’ money was paid to Mansur and his company Great Horizons LLC to perform “contracted-for services.” The Yumas claim the payment to Great Horizons was done without Jefferson State Farms’ knowledge or consent.
On Oct. 14, the Yumas got through to Mansur on the phone.
“Mansur acknowledged taking receipt of Plaintiff’s funds and promised to refund it via wire the next day,” the lawsuit reads, but Mansur never followed through.
The Yumas got $50,000 of their money back on Oct. 18 following a meeting at the White City warehouse, and provided a handwritten note and acknowledging that the Yumas still were owed $86,000.
The next day on Oct. 19, Paul and Mansur showed up at the Yumas’ farm and provided a handwritten document “on behalf of Hemp Warehouse LLC and Palex Enterprises LLC promising that the sum of $86,000 would be paid to the Yumas via cashier’s check” within two days; however, the Yumas claim they “never received any funds and never again heard from defendant Mansur.”
On Nov. 6, the Yumas made another attempt to collect their $86,000 at the Hemp Warehouse and Palex Enterprises facility in White City, which the farm owners claim got physical.
“Defendant Paul was present and physically assaulted Kathleen Yuma, pushing her against the wall and pinning her there by driving his thumbs into her armpits,” the lawsuit claims. “Kathleen Yuma was injured and the Yumas felt intimidated.”
The lawsuit seeks to recoup the $86,000 the Yumas paid, another $200,000 for replacement harvesting and drying services and $11.2 million for “consequential damages” surrounding the lost crop.
The crop would have been worth about $11.2 million, the lawsuit claims, based on the farm’s claimed wholesale value for “flower” as $200 per pound. Instead, the farm had to sell the crop as “combined biomass” for $10 a pound because the neglected crop molded in the field.
As of Friday, none of the three companies or four individuals had yet responded to the civil suit, court records show. Aside from possible states of residence, the court document provides minimal information about the defendants’ whereabouts.
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