California’s “Uber of weed” sued over credit card processing

California’s cannabis technology and delivery company Eaze is sometimes called “the Uber of weed.” But the flourishing firm is facing a legal challenge from a marijuana delivery competitor.

A Canada-based company, DionyMed, has filed a business lawsuit against Eaze Solutions in a California Superior Court alleging that Eaze engages in wire fraud and bank fraud when processing customers’ credit card and debit card payments for marijuana delivery.

Toronto-based DionyMed filed its suit on behalf of its California subsidiary, Herban Industries and its Chill delivery platform.

According to a news report, an Eaze spokesperson has dismissed the DionyMed allegations as “false” and little more than a ploy to boost its stock price and business.

The suit claims that Eaze illegally processes credit card payments through shell companies set up in Europe. “Eaze conspires to disguise the cannabis transactions as transactions for dog toys, dive gear, carbonated drinks, drone components, and face creams, among other things, to obtain approval for these transactions,” DionyMed says in its complaint filed in court.

The Canadian company says Eaze created shell companies in Cyprus and the UK to “sell these seemingly innocuous products,” but that the transactions are a misrepresentation of “the nature of the underlying transactions.”

Though the lawsuit does not make any requests for monetary damages, it does request an injunction to prevent Eaze from making more of the transactions.

Hometown Heart, another DionyMed California subsidiary, broke its ties with Eaze in March, saying it could not verify that Eaze’s “credit card payment processing methodology met regulatory compliance requirements.”

San Diego companies facing business disputes with competitors should speak with a qualified business law attorney devoted to protecting client interests and rights.