Bankruptcy court uncovers cannabis investment fraud, investors lose millions in scheme

A California cannabis investment scheme ended in bankruptcy court, with an October 30, 2025, ruling that found fraud and SEC violations left investors out millions.

Guy S. Griffithe, acting through Renewable Technology Solutions, Inc. (RTSI), solicited investments for a cannabis venture known as Green Acre Pharms. Among those who bought in were Joseph and Brenda Samec, who had recently lost their farm in a fire and invested $150,000. In exchange, they were promised a 1.5% ownership interest in SMRB, LLC, the company that was supposed to run the cannabis business in Washington. For a while, the Samecs received quarterly payments totaling $30,000, but those payments stopped after 2017. The bankruptcy court later found that the business never generated real revenue and that the money paid to investors like the Samecs came from other investors, not from cannabis sales.

The Securities and Exchange Commission (SEC) filed a complaint against Griffithe, RTSI, Green Acre Pharms, and others, alleging several violations of securities law, including fraud in the sale of securities and unregistered offerings. The SEC’s complaint stated that Griffithe defrauded at least 25 investors out of $4.85 million, sold fictitious ownership interests, and misappropriated investor funds for personal use. The SEC also alleged that dividends paid to investors were funded in part from money received by other investors, in a “Ponzi-like fashion.” Griffithe settled with the SEC, agreeing to disgorge over $2 million and pay a civil penalty of nearly $2.9 million. The SEC’s judgment allowed for the possibility that investors could pursue their own claims for damages.

After Griffithe filed for Chapter 7 bankruptcy in 2019, the Samecs filed a complaint in bankruptcy court, seeking to have their debt declared nondischargeable due to fraud and securities law violations. The bankruptcy court held a three-day trial and found that Griffithe’s cannabis venture was never profitable, that investor funds were used to pay other investors and for Griffithe’s personal expenses, and that Griffithe attempted to have the Samecs acknowledge themselves as “accredited investors” two years after their investment. The court found these actions demonstrated fraudulent intent.

The bankruptcy court ruled that the debt owed to the Samecs was nondischargeable under both fraud and securities law provisions. The judge found that Griffithe’s conduct constituted “per se fraud” and that he violated federal and Washington state securities laws. Griffithe argued that a state court dismissal and the SEC settlement should prevent the bankruptcy court from entering judgment, but the appellate panel rejected these arguments. The panel affirmed that the bankruptcy court made its own findings and that neither the state court dismissal nor the SEC settlement precluded the nondischargeability judgment.

This case highlights the risks of investing in unregistered, high-yield ventures and the importance of due diligence. It also demonstrates that regulatory agencies and courts can hold individuals accountable for fraudulent conduct, even when bankruptcy is involved.

The outcome: Griffithe remains liable for the Samecs’ losses, and the decision stands as a reminder that transparency and compliance are essential in any investment offering.