The CEO of a failed CBD company accused by investors of misspending funds and getting a bogus coronavirus-relief loan says the loan has been returned and that credit-card expenses challenged by disgruntled investors were for legitimate business purposes.
Patrick Horsman, whose company Integrated CBD launched in Arizona but failed earlier this year, told Hemp Industry Daily that he sought a loan through the U.S. Paycheck Protection Program (PPP) earlier this year in an effort to rehire staff he’d already laid off.
But the effort failed, and the loan was challenged by Integrated CBD creditors, he said. After successfully fighting those claims, Horsman said, the entire PPP loan of $218,089 was returned to the bank that made the loan. Hemp Industry Daily was unable to confirm the repayment.
Horsman purchased a private jet just as the PPP loan was made, but the plane purchase was with personal funds and not connected to the business, he said. Loan money wasn’t used, he said.
“That’s my personal plane,” he said.
The lawsuit filed by investors calls Horsman the “ringleader” of a fraudulent attempt to bilk investors. Also named in the suit are COO Jeffrey M. Dreyer and Ari M. Schiff, head of agricultural business development.
Horsman told Hemp Industry Daily he plans to contest the lawsuit, which was filed in state court in Arizona and seeks unspecified damages. He said the company failed because of falling CBD prices and inaction by federal health authorities on allowing CBD to be sold outside pharmaceutical channels, not because of executive mismanagement.
“We were trying to do everything organically and with a lot of transparency and kind of do it the right way. And we’re really disappointed in how things have turned out,” he said.