Phoenix New Times:  “The blunt realities of the state’s medical-marijuana industry are exposed in a remarkable ruling on a lawsuit between business partners that features allegations ranging from a ‘lack of financial controls’ to a shady seed deal in a parking lot.  The lawsuit’s between the two partners of Uncle Herbs of Payson, one of the state’s notable licensed medical-marijuana dispensaries. Andrew Provencio . . . and partner Tiffany Young have been engaged in a vicious civil war since late December over a company worth millions.  Now, following Superior Court Judge Randall Warner’s ruling, Young has been found in contempt and has one week to turn over nearly $50,000 in funds allegedly spent on ultra-high-quality cannabis seeds in a transaction that occurred in a parking lot.”

The dispensary license is actually held by Desert Medical Campus, Inc., an Arizona for profit corporation (“DMC”) that was administratively dissolved by the Arizona Corporation Commission on 9/23/15.  The lawsuit is between DMC’s shareholders.

The principals of DMC formed a lot of entities, but failed to operate them independent of DMC.  As a result, the court disregarded the separate existence of the entities and found the assets and liabilities of the entities are assets and liabilities of DMC.  Here’s some interesting statements found in the Judge’s ruling dated September 16, 2015:

“The court finds that A & T Management was operated as a part of DMC and not as a separate entity. Therefore, all assets and liabilities of A & T Management were and are assets of DMC subject to the receivership. . . .

the court finds that the finances and operations of Uncle Herb’s Gift Shop were not kept separate from that of DMC. Therefore, all assets and liabilities of Uncle Herb’s Gift Shop were and are assets of DMC subject to the receivership. . . .

The court therefore concludes that Uncle Herb’s Kitchen is a part of DMC. All assets and liabilities of Uncle Herb’s Kitchen were and are assets of DMC subject to the receivership. . . .

The Receiver therefore properly assumed control over the assets of M & T Management. . . .

Golden Tomatoes, though nominally owned by Mr. Provencio’s cousin as a straw man, was part of DMC. All of its assets are subject to the receivership. . . .

The preliminary injunction prohibited either Mr. Provencio or Ms. Young from acting in any way on behalf of DMC or causing DMC to do anything except with the other’s written consent. . . .

Between March 24 and April 6, Ms. Young took $47,274.46 in cash out of DMC. . . .

Ms. Young testified that the purpose of the cash withdrawal was to purchase marijuana seeds. She testified that she had an agreement with a seller to purchase those seeds. . . .

Ms. Young did not know the seller’s name. But she testified that she trusted the seller because she knew the person who referred her to that seller. . . .

Ms. Young testified that she exchanged the cash for marijuana seeds from the seller in a parking lot. . . .

On or about April 4, 2015, Ms. Young caused DMC to sell approximately $169,000 worth of products to ‘Harvest of Tempe’

[This is a tradename owned by Nowak Wellness, Inc., an Arizona corporation that was administratively dissolved on 8/8/14.] at a 90% discount. . . .

Having found Defendant Tiffany Young in contempt, the court must determine the remedy. . . . First, with respect to the $47,274.46 in cash, the court will order that Ms. Young may purge the contempt by returning that money to the Receiver no later than October 15, 2015. . . .

With respect to the $169,000 in product sold at a 90% discount, the court will consider that transaction subsequently in whatever final accounting is made.”

Query:  Did Tiffany Young violate Arizona’s medical marijuana laws when she purchased seeds for $47,274.46 from a person she did not know?  When Tiffany sold $169,000 of her dispensary’s product was the buyer another licensed Arizona medical marijuana dispensary?  If so, what is its name?