Preview
Kevin Singer
Superior Court Receiver
Receivership Specialists
11150 W. Olympic Boulevard, Suite 810
Los Angeles, California 90064
Telephone: (310) 552-9064
Facsimile: (310) 552-9066
E-Mail: Kevin@ ReceivershipSpecialists.com
Receivership Property:
HERBL, Inc.
SUPERIOR COURT OF THE STATE OF CALIFORNIA
COUNTY OF SANTA BARBARA - SOUTH COUNTY DIVISION
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EAST WEST BANK, a California state ) Case No. 23CV 02629
banking corporation, )
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) SUPERIOR COURT RECEIVER’S
Plaintiff, ) JANUARY 2024 REPORT AND NOTICE
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vs. OF INTENT TO PAY RECEIVER’S FEES
AND EXPENSES
HERBL, Inc., a Califomia corporation
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dba HERBL, HERBL DISTRIBUTION Hon. Colleen K. Sterne
SOLUTIONS, and HDS NATURALS, Dept. 5
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Defendant. Complaint Filed: June 20, 2023
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RECEIVER’ S REPORT 003
RECEIVERSHIP SPECIALISTS
STATE AND U.S. FEDERAL COURT RECEIVERS/REFEREES/TRUSTEES
Corporate Headquarters
os Angel
SUPERIOR COURT RECEIVER’S JANUARY 2024 REPORT AND 11500 W. Olympic Blvd.
Suite 530
NOTICE OF INTENT TO PAY RECEIVER’S FEES AND EXPENSES Los Angeles, CA 90064
Tel: 310) 552-9064
Fax. 310) 552-9066
Presented by Kevin Singer, Superior Court Receiver
Irvine
One Park Plaza
Suite 600, PMB 435
Invine, CA 92614
EAST WEST BANK, a California state banking corporation; Tel: 949) 238-2801
Plaintiff Fax. 949) 852-4480
Vv. San Francisco
1 Sansome Street.
Suite 3500
HERBL, INC., a California corporation, dba HERBL, HERBL San Francisco, CA 94104
Tel: 415) 590-4823
DISTRIBUTION SOLUTIONS, and HDS NATURALS; Fax. 415) 946-8837
Defendant
San Diego
4660 La Jolla Village Drive
Suite 100
San Diego, CA 92122
Santa Barbara County Superior Court Case No. 23CV 02629 Tel: (858) 546-4815
Fax. 858) 646-3097
Presiding Judge: Hon. Colleen K. Steme
Ventura/Santa Barbara
Receivership Estate: 1500 Palma Drive
2nd Floor
HERBL, Inc. Ventura, CA 93003
Tel: 805) 267-1283
Fax. 805) 654-0080
Sacramento
980 9th Street
16th Floor
Sacramento, CA 95814
Tel: 916) 449-9655
Fax. 916) 446-7104
Las Vegas
7251 W. Lake Mead Blvd.
Suite 300
Las Vegas, NV 89128
Tel: 702) 562-4230
Fax. 702) 562-4001
Reno
200 S. Virginia Street
Suite 800
Reno, NV 89501
Tel: 775) 398-3103
Fax. 775) 686-2401
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RECEIVER’S REPORT 003
February 27, 2024
Dear Vested Parties:
On June 28, 2023, the Court, the Honorable Colleen K. Sterne presiding,
entered Order (1) Approving Stipulation for Appointment of Receiver; (2)
Appointing Receiver; and (3) Issuing Preliminary Injunction (the “Appointing
Order”) which appointed me, Kevin Singer, as Superior Court Receiver (the
“Receiver”) over defendant HERBL, Inc. (“HERBL” or the “Business”) and all
of its assets.
HERBL is a major cannabis distribution company with subsidiaries in
California and Nevada. I have been appointed to take possession, custody, and
control of HERBL, and to ultimately sell HERBL’s assets. I was appointed
pursuant to a stipulation at the request of Plaintiff East West Bank (“Plaintiff”)
after HERBL defaulted on a loan obtained from Plaintiff.
Plaintiff is represented by Marshall J. Hogan, Esq. (“Hogan”), Andrew B.
Still, Esq. (“Still”), and Bryce A. Suzuki, Esq. (“Suzuki”) of Snell & Wilmer
LLP. Hogan, Still, and Suzuki are referred to herein individually and collectively
as “Plaintiffs counsel”. Defendant is not represented by counsel; CEO Michael
Beaudry (“Beaudry”) signed the stipulation for my appointment on HERBL’s
behalf. Plaintiff and Herbl are each referred to herein individually as a “Party”
and collectively as the “Parties”.
Locations associated with HERBL include:
1) 749 and 839 Ward Drive, Goleta, CA (collectively, the “Goleta
Property,” which I understand includes several buildings);
2) 3144 W. Adams Street #C, Santa Ana, CA (the “Santa Ana
Property”);
3) 3152-3158 Condo Street, Santa Rosa, CA and 600 Bicentennial Way,
Santa Rosa, CA (collectively, the “Santa Rosa Properties’);
4) 580 Sunshine Lane, Reno, NV and 4291 Danta Blvd., Reno, NV
(collectively, the “Reno Properties”); and
5) 6450 S. Cameron Street #110, Las Vegas, NV (the “Las Vegas
Property”).
The following summarizes what has transpired since I assumed my role as
the Receiver in this matter through the end of January 2024:
June 2023 Activity:
>}>
6/14/2023 I executed my Oath of Receiver, which Plaintiff
subsequently filed on June 26, 2023. Note that the
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RECEIVER’S REPORT 003
stipulation for my appointment had been executed during
May 2023. I subsequently began preparations to assume my
duties upon the Court’s entry of the Appointing Order,
including reviewing documents and records relating to
HERBL and speaking with brokers regarding potential
asset sales.
6/27/2023 My Senior Project Manager Jen Gote (“Gote”) met via
phone with Mary Lou Allen (“Allen”) and Stuart Broma
(“Broma”) of Plaintiff, along with Suzuki, regarding my
appointment to gather information about HERBL.
6/28/2023 I spoke via phone with Plaintiffs representatives regarding
my appointment, HERBL’s assets, and immediate action
items.
6/28/2023 Following a phone introduction, I prepared and sent (via
email) a letter to Jacqueline Hartwell (“Hartwell”),
HERBL’s Chief Financial Officer, in which I formally
advised of my appointment and requested numerous
documents and information relating to HERBL.
6/29/2023 Hartwell sent me a Notice of Determination issued to
HERBL on June 1, 2023, by the California Department of
Tax and Fee Administration (the “CDTFA”) which states
that HERBL owes a total of $2,501,983.08 in taxes,
penalties, and interest.
6/29/2023 I corresponded via email with Mason Sperakos
(“Sperakos”), a Special Investigator with the Department
of Cannabis Control (the “DCC”), regarding my
appointment and HERBL’s status. I advised Sperakos that
it is my understanding that HERBL has temporary ceased
distributions and that my compliance counsel, Sharmi
Shah, Esq. (“Shah”), is filing the necessary paperwork with
the DCC to bring HERBL’s cannabis licenses under my
control.
6/29/2023 Gote and I traveled to the Goleta Property for an initial
inspection, takeover, and meeting with Beaudry and
Hartwell.
6/30/2023 Gote retumed to the Goleta Property to continue our
takeover and review of documents on site.
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RECEIVER’S REPORT 003
6/30/2023 Shah and I spoke via phone with Sperakos and other DCC
representatives regarding the receivership and HERBL’s
status.
6/30/2023 Shah submitted four Notification and Request forms to the
DCC regarding my appointment.
6/2023 As of the end of June 2023 I had just commenced my
appointment and was rapidly working to review all of
HERBL’s assets and payment obligations. My team is
particularly focused on wholly-owned HERBL subsidiary
Blackbird Logistics Corp. (“Blackbird”), a Nevada entity
which appears to be HERBL’s most valuable asset.
6/2023 Note that I was appointed two days before the end of June
2023 and would ordinarily have waited to prepare this
Initial Receiver’s Report until after the end of July 2023.
However, doing so would mean that my initial report would
not be filed until mid-August 2023, contrary to the
Appointing Order’s instructions regarding the timing for
my initial report, and thus I have prepared the instant
report, which covers the final days of June 2023. Because
of the short time period covered herein, I have not prepared
financials for June 2023; I will present financials for July
2023 with my July 2023 Receiver’s Report.
July 2023 Activity:
7/2023 Note that July 2023 was an extraordinarily active month for
the receivership. To reduce administrative expenses, this
report provides a summary of key events rather than an
exhaustive account of my team’s activities. For a day-to-
day account, please refer to my July 2023 invoice.
7/2023 During early July 2023 I approached various major
cannabis businesses (including Kiva, Nabis, Statehouse,
Glass House, Mammoth, and Petalfast) in an effort to sell
all of the Receivership Estate’s assets in a single
transaction. However, there was no market interest in
purchasing all of HERBL’s assets together. Consequently, I
determined that the best path forward would be to sell
HERBL’s assets individually.
7/3/2023 I received a letter from William W. Hatcher, Esq.
(“Hatcher”), counsel for the owner of 3152-3158 Condo
Street (one of the Santa Rosa Properties), advising that the
owner had commenced eviction proceedings prior to my
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RECEIVER’S REPORT 003
appointment due to unpaid rent in the amount of
$20,405.30 as of June 30, 2023. Hatcher requested an
update on the rent payment.
As Hatcher’s client is an unsecured creditor, I am unable to
remit payment at this time as doing so could constitute a
preferential payment. The same is true for HERBL’s other
landlords.
7/5/2023 My team conducted a takeover of Blackbird’s Reno
facilities.
7/7/2023 The CDTFA sent a letter to Beaudry and HERBL advising
that HERBL’s sales and use tax account has been selected
for a “routine audit” for July 1, 2020 through June 30,
2023.
7/5/2023 My team conducted a takeover of Blackbird’s Las Vegas
facilities.
7/10/2023 B.H. 3640 Central Avenue, LLC, landlord for 600
Bicentennial Way (one of the Santa Rosa Properties) filed
an unlawful detainer action against HERBL.
7/11/2023 I executed a consulting agreement with WeCannca, Inc.
(“WeCann”) to market the Receivership Estate assets for
sale with a projected listing price of $9,000,000.
7/12/2023 The CDTFA filed a Notice of State Tax Lien against
HERBL in the amount of $17,343,418.75.
7/19/2023 The DCC issued a pair of Notices to Comply relating to the
Goleta Property which advised that Professional Technical
Union, Local 33 (“Pro-Tech 33”) has been determined by
the ALRB to not be a bona fide labor organization, and
consequently HERBL’s labor peace agreement with Pro-
Tech 33 is insufficient to satisfy regulatory requirements.
As such, HERBL has been directed to enter into a labor
peace agreement with a bona fide labor organization on or
before October 17, 2023.
7/23/2023 I engaged the law firm Howard & Howard to provide legal
counsel to the Receivership Estate in the State of Nevada,
where I must domesticate the A ppointing Order in order to
proceed with sales of Blackbird and the other Nevada
assets. John Savage, Esq. (“Savage”) will be lead counsel.
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RECEIVER’S REPORT 003
7/27/2023 I prepared and submitted (on HERBL’s behalf) a City of
Santa Ana Monthly Cannabis — Distribution Business
License Tax Report for June 2023, which reported a total
amount due of $1,704.
7/27/2023 I prepared and submitted (on HERBL’s behalf) an El
Dorado County Commercial Cannabis Activities Tax
Apportionment Form for June 2023, which reported a total
amount due of $77.06.
7/28/2023 I prepared and submitted (on HERBL’s behalf) a pair of
City of San Diego Cannabis Business Tax Apportionment
Forms for June 2023, which reported total amounts due of
$61.02 (non-cash) and $95.97 (cash), respectively.
7/28/2023 I prepared and submitted (on HERBL’s behalf) a pair of
City of San Diego Cannabis Business Tax Apportionment
Forms for May 2023, which reported total amounts due of
$402.72 (non-cash) and $61.04 (cash), respectively.
7/28/2023 I prepared and submitted (on HERBL’s behalf) a City of
Goleta Cannabis Business Tax Return for Q2 2023, which
reported a total amount due of $29,814.20.
7/27/2023 I prepared and submitted (on HERBL’s behalf) an El
Dorado County Commercial Cannabis Activities Tax
Apportionment Form for May 2023, which reported a total
amount due of $195.48.
7/31/2023 My counsel prepared, served, and filed two ex parte
applications:
1. An application for issuance of an order scheduling
an auction sale of all of HERBL’s assets (in orderto
expedite resolution of the receivership and
minimize ongoing administrative costs, thereby
maximizing funds available for creditors); and
An application for various administrative orders,
including setting my bond amount, clarifying that
HERBL’s subsidiaries are part of the Receivership
Estate, authorizing my retention of Ervin Cohen &
Jessup LLP and Howard & Howard nunc pro tunc,
authorizing me to enter into settlement agreements
and sales under $100,000 without Court
confirmation, authorizing me to continue utilizing
the services of HERBL’s pre-receivership debt
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RECEIVER’S REPORT 003
collector (Jonathan Neil & Associates, Inc.
(JNA”)) and their counsel (Bruce Hatkoff
(“Hatkoff’) and Robert Pollak (“Pollak”)) and
authorizing me to file debt collection lawsuits on
HERBL’s behalf, and authorizing me to file an
action in Nevada to domesticate the Appointing
Order.
The Court ultimately granted both applications in early
August 2023. The auction sale was initially scheduled for
August 28, 2023, but has since been rescheduled for
September 7, 2023.
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7/2023 As of the end of July 2023 I was negotiating a settlement
agreement with Glass House regarding a dispute between
HERBL and Glass House over accounts receivable, which
settlement will bring in additional funds for the
Receivership Estate.
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7/2023 As of the end of July 2023 I had gained control of the
Receivership Estate’s assets, including but not limited to:
Entities: HERBL, Inc., HERBL Pro, Inc., Blackbird
Logistics Corp. (including its intellectual property), and
Blackbird’s subsidiaries, Bootleg Courier Company, LLC,
Blkbrd Software, LLC, Blkbrd OCA, LLC, Blkbrd CA,
Corp, and Blkbrd NV, LLC;
IL California_cannabis licenses: C11-0000975-LIC, C11-
0001467-LIC, C11-0001080-LIC, C11-0001135-LIC, and
C11-0000794-LIC;
ili California leases and FFE: 3158 Condo Court, Santa Rosa;
3152 Condo Court, Santa Rosa; 749 Ward Drive, Goleta;
759 Ward Drive, Goleta; 839 Ward Drive, Goleta; 3144 W.
Adams St., Suite C, Santa Ana; and 600 Bicentennial Way,
Santa Rosa;
Iv, Nevada leases and FFE: 465 Sunshine Ln, Reno, NV; 580
Sunshine Ln, Reno, NV; 6450 Cameron Way #110, Las
Vegas, NV; and
Approximately 90 collections actions (being handled by
JNA on HERBL’s behalf).
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August 2023 Activity:
>}>
8/2023 Note that August 2023 was an extraordinarily active month
for the receivership. To reduce administrative expenses,
this report provides a summary of key events rather than an
exhaustive account of my team’s activities. For a day-to-
day account, please refer to my August 2023 invoice.
8/1/2023 The Court heard and granted both of my ex parte
applications.
8/2/2023 The Court entered Order re Receiver Kevin Singer’s Ex
Parte Application to Schedule Auction Sale, which
scheduled the auction sale for August 28, 2023 at 2:00 PM.
8/3/2023 Gote provided an update to Plaintiff on our efforts. As of
this date:
The Santa Rosa Properties were nearly closed out and the
new owner for 3158 Condo Street had purchased the
remaining racking and equipment for $40,000, along with
three trucks for an additional total of $45,000. Gote also
reported sales of three additional trucks at the Santa Rosa
Property for a total of $28,500. The 600 Bicentennial Way
location was turned over to its landlord as there was no
interest in the furniture therein.
IL The Santa Ana Property will be turned over to its landlord,
who has refused to cooperate with the receivership.
Fortunately, the associated cannabis permit can be
relocated to a new location.
ili We are transferring two box trucks with office equipment
from Goleta to Nevada to improve operational efficiency.
Iv, JNA continues to work to collect the approximately $2.5
million in accounts receivable that we placed with them for
collection. Over the past year they have reportedly
recovered $180,000 at roughly 28 cents per dollar.
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8/4/2023 The Court entered Order re Receivership Administrative
Issues, which, inter alia, set my bond amount. I
subsequently made arrangements to post my $10,000 bond.
8/9/2023 I executed a pair of bills of sale to sell a 2018 Ford Transit
150 and a 2019 Ford Transit 350, both owned by HERBL,
to Seed to Leaf Inc for $8,000 and $10,000, respectively.
8/9/2023 Claims management company Sedgwick sent a letter to
HERBL (which I later obtained) on behalf of HERBL’s
insurer, Transverse Specialty Insurance Company,
regarding a complaint filed on June 20, 2023 by Kiffen,
LLC against HERBL, Beaudry, and Hartwell. Sedgwick
advised that HERBL’s policy does not afford coverage for
the complaint.
8/10/2023 Ricardo Ramos of the City of San Diego, Office of the City
Treasurer contacted my office regarding HERBL’s
outstanding cannabis tax balance and provided a copy of a
notice dated August 2, 2023, which states a total balance
due to the City of San Diego of $748,850.99.
8/11/2023 I executed a creditor’s declaration prepared by JNA for the
North Country Operations collections matter (Sacramento
County case number 23CV 000771), which seeks payment
of $108,892.30 owed to HERBL.
8/14/2023 Savage prepared, served, and filed (in Clark County,
Nevada District Court) a Verified Petition to Appoint
Ancillary Receiver (the “Nevada Petition”), whereby I
sought an order from a Nevada court appointing me as
ancillary receiver over all of HERBL’s Nevada assets
pursuant to the same terms and provisions of my
Appointing Order.
8/14/2023 Savage prepared and sent a pair of letters to the Nevada
Cannabis Compliance Board (the “Nevada CCB”). The
first, captioned Notice of Transfer of Interest, advised of
my appointment and asked the Nevada CCB to complete
processing a Transfer of Interest (“TOI”) application
submitted prior to my appointment which sought to transfer
cannabis distribution licenses T002 and T003 from
Crooked Wine Company, LLC (“Crooked Wine”) to
Blkbrd.
The second letter, captioned Management Agreement
Update, inquired as to whether the CCB requires any
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RECEIVER’S REPORT 003
additional information or documentation to update its
records and keep the management agreement (whereby
Blackbird operates Crooked Wine’s cannabis distribution
licenses) in good standing.
8/14/2023 I received a Statement of Account from the CDTFA,
addressed to BLKBRD OCA, LLC (a California entity),
which reports a balance due of $2,526,634.86 for cannabis
taxes, along with a Notice of Redetermination advising that
a $10,837.02 credit was applied to the previously-reported
balance. It appears from the notice that this tax balance
solely relates to the California entity BLKBRD OCA, LLC
and does not impact the Nevada entities.
8/15/2023 Tim McMahon, counsel for Kind Op Corp (aka
“POSIBL”), sent a letter to HERBL, copying me, which
states that POSIBL is terminating its supplier agreement
with HERBL.
8/15/2023 As part of a settlement agreement with Glass House Brands
(“Glass House”) which will bring in a payment of
$100,000 to the Receivership Estate, Glass House’s
chairman, Kyle Kazan (“Kazan”) and I executed a joint
letterto HERBL and Glass House’s customers advising that
Glass House is entitled to receive its accounts receivable
for Glass House products delivered by HERBL beginning
March 28, 2023 and that HERBL will not be seeking to
separately receive said accounts receivable.
8/17/2023 I executed a Settlement Agreement and Mutual Release (on
HERBL’s behalf) with Speedy Weedy Vista, Inc., Speedy
Weedy Santa Ana LLC, and Welcome the Healing Touch,
Inc (collectively, “Speedy Weedy”), whereby Speedy
Weedy will pay $160,000 to HERBL over twelve
payments, with the final payment due October 1, 2024.
8/18/2023 I executed a stipulation in a collections matter brought by
HERBL against Canna Cloud, LLC (“Canna Cloud”)
(Riverside County case number CVRI2303105) whereby
Canna Cloud shall pay $36,287.67 to HERBL in three
payments, with the final payment due by September 15,
2023.
8/18/2023 I executed a creditor’s declaration prepared by JNA for the
SJV Management and Go Treez collections matter
(Sacramento County case number 23CV001420), which
seeks payment of $14,775.96 owed to HERBL.
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8/22/2023 My counsel prepared, served, and filed Receiver Kevin
Singer’s Ex Parte Application for Issuance of Order
Authorizing and Confirming Sale of Receivership Personal
Property (the “Goleta Ex Parte”). The Goleta Ex Parte
sought Court approval of a proposed sale of HERBL’s
personal property at 759 and 839 Ward Dr, Goleta, CA
93111 to Central Coast Processing LLC for $350,000.
8/22/2023 Counsel for Townsgate Business Park 2 and Majestic Luna
2, LLC, HERBL’s landlord for the Goleta Property, filed an
ex parte application (the “Landlord Ex Parte”) for an
order modifying my Appointing Order, namely, (1)
requiring me to remove HERBL’s personal property from
the Goleta Property and surrender possession within five
business days, (2) requiring me to pay prorated rent to the
landlord in the amount of $57,683.85, and (3) allowing the
landlord to dispose of HERBL’s personal property if it is
not removed within five business days.
8/23/2023 My counsel prepared, served, and filed an opposition to the
Landlord Ex Parte, arguing that it lacked exigency and that
the requested relief would violate unlawful detainer
requirements and would constitute a preferential
distribution.
8/23/2023 I received and reviewed a letter from the City of Santa
Rosa, addressed to Beaudry and HERBL, advising that the
City of Santa Rosa has engaged Avenue Insights &
Analytics LLC / MuniServices, LLC to conduct an audit of
HERBL’s business tax payments for January 1, 2020,
through December 31, 2022. Gote has advised the City of
Santa Rosa that HERBL has ceased business operations.
8/23/2023 I received a letter from collections agency Tavco Credit
Services which sought payment of a purported $1,107.91
balance allegedly owed by HERBL to Leetee Generators.
8/24/2023 The Court heard the Goleta Ex Parte and the Landlord Ex
Parte and continued the hearings to August 29".
8/25/2023 I prepared, served, and filed Notice of Receiver ’s Bond.
8/25/2023 I prepared and submitted a Nevada Cannabis Compliance
Board agent card application. As a preview to the
September 2023 Receiver’s Report, the CCB issued a
temporary agent card to me in early September 2023.
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8/28/2023 The Nevada Court entered Order Granting Motion to
Appoint Ancillary Receiver on Order Shortening Time (the
“Nevada Appointing Order”).
8/29/2023 The Court granted my Goleta Ex Parte and denied the
Landlord Ex Parte.
8/31/2023 I prepared and submitted (on HERBL’s behalf) a City of
Santa Ana Monthly Cannabis — Distribution Business
License Tax Report for July 2023, which reported a total
amount due of $1,704.
8/31/2023 I executed an additional creditor’s declaration for a JNA
collections matter whereby HERBL seeks to recover
$33,496.97 from Northem Erudite Ventures dba
HERBNJOY and Hanford Erudite dba HERBNJOY .
September 2023 Activity:
9/2023 Note that September 2023 was another extraordinarily
active month for the receivership. To reduce administrative
expenses, this report provides a summary of key events
rather than an exhaustive account of my team’s activities.
For a day-to-day account, please refer to my September
2023 invoice.
9/1/2023 I prepared, served, and filed a second Oath of Receiver with
the Nevada Court (as required by the Nevada Appointing
Order).
9/6/2023 I executed a declaration in support of a request for entry of
default judgment in the collections matter HERBL v. Urban
Buds LLC et al. The total judgment sought is $173,665.31.
9/7/2023 I conducted the auction of HERBL’s assets. However, none
of the assets were sold at the auction as no bidders were
willing to meet the reserve prices for any of the assets. I
will now reengage with the prospective purchasers.
9/7/2023 Gote provided an update to Plaintiff on the receivership.
Key points included:
1. Background on the auction outcome, including
presenting the tracking sheet used to monitor
Campuzano’s communications with over 100
prospective purchasers prior to the auction;
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We intend to reengage with the prospective
purchasers who declined to participate in the
auction.
Tumover of the Goleta Property is expected to be
completed on the following day (9/8/23).
HERBL’s actual accounts receivable appear to be
closer to $1 million than the originally-estimated $7
million because HERBL owes significant sums to
product manufacturers, having acquired inventory
on consignment.
We are moving forward with the Transfer of
Interest process for the licenses held by Crooked
Wine.
9/8/2023 The Nevada CCB issued a temporary agent card to me,
which card is valid for 90 days.
9/14/2023 Gote provided another update on the receivership to
Plaintiff. By this date, all California locations had been
retumed to the landlords and the HERBL licenses for the
Santa Rosa and Goleta Properties had been surrendered.
The Santa Ana license remains listed for sale.
9/19/2023 I submitted additional paperwork (as well as LiveScan
fingerprinting) to the Nevada CCB as part of my efforts to
gain full control of the licenses held by Crooked Wine.
9/26/2023 I executed a settlement agreement in the Kiffen v. HERBL
matter whereby Kiffen will dismiss its complaint without
prejudice and will instead submit its claim to me for
inclusion in my final accounting.
9/26/2023 Chris Parman, the plaintiff in Parman v. HERBL, submitted
a claim letter to my counsel regarding his claim for
damages in the amount of $814,587.90. Following
negotiations with my counsel, Parman dismissed his
lawsuit without prejudice and I will present his claim to the
Court in my final accounting.
9/28/2023 I executed a Stipulation for Entry of Judgment in HERBL v.
ASG LA Distribution LLC dba Space Booth whereby
judgment shall be entered in HERBL’s favor in the amount
of $35,009.13. Space Booth will have an opportunity to pay
$15,000 over fifteen monthly payments to resolve the
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RECEIVER’S REPORT 003
judgment. If Space Booth fails to pay, the full judgment
amount will be due.
9/28/2023 I received and reviewed a FedEx statement of account sent
to HERBL which reports a balance due of $10,427.02. I
also received and reviewed a separate letter from FedEx
advising that HERBL’s credit privileges have been
terminated.
9/28/2023 I received and reviewed a letter from the CDTFA to Blkbrd
OCA, LLC, captioned Demand for Immediate Payment,
which seeks payment of $2,686,871.48, along with an
accompanying Statement of Account reflecting the same
balance.
9/28/2023 I received and reviewed an Employer Billing Statement
issued to HERBL by the Nevada Department of
Employment, Training and Rehabilitation (“DETR”),
which reports a balance due of $10,196.73.
9/30/2023 I executed a declaration for submission to the Nevada CCB
in support of my application to be placed as receiver over
the Crooked Wine licenses.
9/2023 As a preview to the October 2023 Receiver’s Report, I have
an offer to purchase HERBL’s accounts receivable for $1.1
million. I am working with the prospective purchaser to
reach a formal purchase agreement.
October 2023 Activity:
10/2023 Note that October 2023 was another extraordinarily active
month for the receivership. To reduce administrative
expenses, this report provides a summary of key events
rather than an exhaustive account of my team’s activities.
For a day-to-day account, please refer to my October 2023
invoice.
10/2/2023 Gote submitted a revised 90-day budget to Plaintiff.
10/2/2023 I executed IRS Form 872, Consent to Extent the Time to
Assess Tax, whereby HERBL agreed to extend the deadline
for the IRS to assess income taxes due for 2019 and 2020 to
March 31, 2025.
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10/5/2023 I executed IRS Form 870, Waiver of Restrictions on
Assessment and Collection of Deficiency in Tax and
Acceptance of Overassessment.
10/5/2023 Gote and I held a meeting with a number of Califomia
cannabis companies that are owed money for inventory
they provided to HERBL and discussed my strategy for
collecting the remaining accounts receivable.
10/7/2023 Joshua Keats (“Keats”) executed a letter of intent on behalf
of a group of unsecured creditors to acquire HERBL’s
remaining accounts receivable.
10/11/2023 The DCC sent a pair of letters to Shah confirming the
surrenders of licenses C11-0001467-LIC and C11-
0001135-LIC, both effective October 10, 2023.
10/12/2023 The City of San Diego Office of the City Treasurer sent a
letter to HERBL advising of an unpaid cannabis business
tax balance of $759,042.37.
10/20/2023 My (Nevada) counsel prepared, served, and filed
Receiver’s Motion for Authorization and Approval to: (1)
Acquire Cannabis Licenses Subject to CCB Approval and
Indemnification of Seller; and (2) Be Placed as Cannabis
Receiver over Cannabis Licenses Subject to CCB Approval
(the “Nevada Licenses Motion’) The Nevada Court
subsequently granted my request for an order shortening
time and scheduled the hearing for November 2, 2023. Asa
preview to the November 2023 Receiver’s Report, the
Nevada Court ultimately granted the Nevada Licenses
Motion.
10/20/2023 Samuel Ray, Esq. (“Ray”), counsel for Kiffen LLC, sent a
letter to my counsel presenting Kiffen’s claim against
HERBL.
10/23/2023 I executed a Labor Peace Agreement Notarized Statement
on HERBL’s behalf to satisfy California regulatory
requirements.
10/26/2023 I received a letter captioned “Notice of Experience Rating
Charges” sent by the New York State Department of Labor
to HERBL.
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RECEIVER’S REPORT 003
10/26/2023 I received a letter captioned “Statement of Taxpayer” sent
by the State of Tennessee Department of Revenue to
HERBL.
10/26/2023 I received a letter from the CDTFA to HERBL advising
that the Appeals Bureau had held a hearing in Case ID 0-
004-584-135 on October 11, 2023, and inviting HERBL to
provide additional information, documentation, or
arguments. I am investigating this matter (of which I was
previously unaware) and my counsel has made contact with
the A ppeals Bureau.
10/2023 During October 2023 I received numerous payment checks
from various vendors and entities, including but not limited
to
. $850 from JNA;
. $1,900 from Silver Sage Wellness LLC;
. $10,000 from Ross Clark Material Handling;
. $3,280 from Rizzo;
. $1,330 from Indoor Garden Farms LLC;
. $7,030.25 from WS Advisors;
. $1,550 from JNA;
. $2,840 from Gravitas Henderson LLC;
. $10,449.75 from Acres Medical LLC;
10. $2,153 from Silver State Cultivation LLC;
11. $20,050 from SSAC Corp;
12. $3,065 from Clover Creek Organics LLC;
13. $5,308.90 from NueSynergy;
14. $8,841.22 from State of Nevada Department of
Employment, Training & Rehabilitation; and
15. $1,400 from Gravitas NV Ltd LLC.
10/2023 As a preview to the November 2023 Receiver’s Report, I
have executed an asset purchase agreement to sell the
Business’s remaining accounts receivable for $900,000. I
am also engaged in negotiations to sell Blackbird.
November 2023 Activity:
>}>
11/2023 Note that November 2023 was another extraordinarily
active month for the receivership. To reduce administrative
expenses, this report provides a summary of key events
rather than an exhaustive account of my team’s activities.
For a day-to-day account, please refer to my November
2023 invoice.
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RECEIVER’S REPORT 003
11/1/2023 I received a letter from the City of San Diego Office of the
Treasurer, addressed to HERBL, seeking payment of a
purported cannabis business tax balance of $759,042.37.
11/1/2023 At my direction, Calder Cohen of Blackbird contacted the
Nevada Secretary of State and formally advised of my
appointment.
11/1/2023 Donner traveled to Reno, conducted an inspection, and met
with Blackbird’s landlord. Donner negotiated a one-year
lease extension as Blackbird’s lease was about to expire.
11/6/2023 My counsel filed a Notice of Non-Opposition regarding my
Nevada Licenses Motion.
11/9/2023 I entered into an Asset Purchase Agreement with Distro
Accounts Receivable LLC to sell the Business’s accounts
receivable for $900,000. The purchase price was ultimately
reduced to $600,000 to account for a reduced amount of
accounts receivable included in the transaction, as well as
adverse market conditions. The buyer has since wired a
$300,000 deposit to my trust account. As a preview to the
December 2023 Receiver’s Report, I am now seeking Court
confirmation of the sale.
11/13/2023 I executed CDTFA forms 82 and 392 on HERBL’s behalf
to authorize the CDTFA to communicate with my counsel
and my CPA.
11/13/2023 I received a collections letter from Sequium Asset
Solutions, LLC, seeking collection of a purported
$2,014.55 allegedly owed to Comcast.
11/15/2023 I submitted a payment in the amount of $339.46 to El
Dorado County to close out HERBL’s commercial
cannabis tax account.
On November 21, 2023, I received an email confirming the
account closure.
11/15/2023 Plaintiff and I executed Stipulation and [Proposed] Order
Authorizing Receiver to Enter Into Contingency Agreement
with Counsel, which will authorize me to enter into a
contingency agreement with Ervin, Cohen & Jessup LLP to
litigate Herbl Inc. v. Central Coast Agriculture, Inc. dba
Raw Garden; Nabione, Inc. dba Nabis, et. al. (the
“Contingency Stipulation”), Santa Barbara County case
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RECEIVER’S REPORT 003
22CV 00077.
My counsel also filed an ex parte application regarding the
Contingency Stipulation, which the Court granted. My
counsel subsequently served notice of the order on
November 30, 2023.
11/18/2023 I received an Unsecured Property Tax bill from Clark
County, Nevada, addressed to Blackbird, in the amount of
$205.78.
11/24/2023 I received an additional letter from the City of San Diego
Office of the Treasurer, this time seeking collection of a
purported cannabis business tax balance of $762,058.29.
11/24/2023 I received a collections letter from CBE Group seeking
payment of a purported $21,919.06 balance allegedly owed
to Verizon Wireless.
11/24/2023 I received a collection notice from the City of Santa Rosa
seeking payment of a purported $511.43 balance.
11/24/2023 I received a collections letter from AGA seeking payment
of a purported $11,923.86 balance allegedly owed to
FedEx.
11/27/2023 The Nevada Court entered a minute order granting my
Nevada Licenses Mo