rewrite this title and make it good for SEOMike Tyson, Ric Flair claim fraud in celebrity cannabis brand efforts

Legendary boxer Mike Tyson and professional wrestling icon Ric Flair’s attempts to launch celebrity cannabis brands resulted in “a brazen … conspiracy involving criminal wire fraud, embezzlement (and) money laundering,” the pair alleged in a federal lawsuit filed last month.

Tyson and Flair are the lead plaintiffs in a 76-page complaint filed Dec. 19 in U.S. District Court in Illinois that accuses four former executives and shareholders in Carma, a Chicago-based branding company that’s also a plaintiff, of “defrauding” the celebrities and using the firm “as their own personal piggy bank.”

The suit alleges 21 separate counts of fraud and breach of contract. It seeks damages, legal fees and costs “in excess of $50 million” – and, should it go to trial and result in discovery, promises to shine a light on how investors and brand partners may have attempted to cash out of deals quickly following the $32 billion cannabis industry’s boom period rather than build lasting presences.

Additionally, according to the suit, the former executives at Carma made “unauthorized” side deals selling the celebrities’ likenesses, including with a vape manufacturer and a licensed California cannabis cultivator, that “resulted in financial losses” to Carma “but lined (their own) pockets.”

Mike Tyson, Ric Flair and Future claim partners in celebrity cannabis brands defrauded them

The suit names as defendants:

Chad Bronstein, Carma’s former chairman and president, who owned a boat slip next to Flair’s in Tampa
Adam Wilks, Carma’s former CEO
Nicole Cosby, whom the suit claims was a board member before becoming chief legal and licensing officer
James Case, a Carma shareholder who received shares “free of charge” from Bronstein

No attorney information for the four defendants was available Thursday, according to a court docket.

The defendants have not issued a response in court, records show.

Attempts to contact Tyson, Carma’s current CEO and Flair were not immediately successful.

A fourth plaintiff, Miami-based “global hemp company” LGNDS, which purchased the rights to use Tyson’s likeness on “hemp products, mushroom products, nicotine products, kava products, and other merchandise, such as shirts, pants, sweaters, and footwear.”

The suit also mentions musician Future, born Nayvadius DeMun Cash, as a celebrity whose licensing rights the former Carma figures allegedly sold without the celebrity’s consent.

Future, who has a Florida-based cannabis brand called EVOL by Future, is not named as a plaintiff in the suit.

Allegations that celebrity cannabis branding efforts became vehicles for ‘self dealing’

The suit alleges a broad pattern of misconduct, including securities fraud as well as unapproved sponsorships with the Cleveland Cavaliers NBA franchise and “dozens” of unauthorized sublicenses that began shortly after Tyson, Bronstein and Wilks formed Carma HoldCo, “also known as Tyson 2.0, in 2021.”

The company used Tyson’s likeness and intellectual property to market products, including “cannabis pre-rolls, vape cartridges, and hemp gummies.”

According to the suit, Bronstein and Wilks told investors that Carma, valued at $80 million, was in fact worth $120 million – and sold their own shares in the company “for profits in excess of $1 million.”

The suit also accuses Bronstein, Wilks and Case of soliciting personal gifts, including $50,000 Rolex watches, from Carma business partners instead of the normal licensing fees for using the celebrity likenesses.

The suit accuses Bronstein of forming a new company to market Flair’s likeness, called Ric Flair Drip Inc., in which Flair was tricked into unknowingly signing away his intellectual property.

Bronstein then sold a significant portion of the company to Carma but cut Flair out of the deal, the suit states.

The defendants also paid themselves exorbitant salaries and awarded themselves excessive bonuses, according to the lawsuit.

Northern California cannabis connection, investor playing both sides of deals

According to the lawsuit, Wilks also served as the CEO at Captor Capital, a cannabis investment firm that held stakes in Northern Emeralds, an upscale cannabis brand based in Northern California, and in DomPen, a vape company.

In August 2022,  Carma and Northern Emeralds signed a deal that would see the cannabis firm market and produce Tyson 2.0-branded cannabis flower and pre-rolls partially in exchange for royalties, according to the lawsuit.

However, “From 2022 to 2025, Northern Emeralds failed to pay CARMA more than $1.25 million pursuant to the agreement,” the suit alleges.

The suit claims that this was partly because Wilks received equity in Northern Emeralds in exchange for waiving the payments for his role at Carma.

Instead, loaned Carma cash to Northern Emeralds, which still owes “more than $140,000” in unpaid loans.

Northern Emeralds did not immediately respond to a request for comment.

Does celebrity cannabis work?

Celebrity brands have had mixed success in the cannabis industry.

As MJBizDaily reported in 2023, celebrity brands outsold traditional cannabis brands “by a healthy margin” that year.

However, Flair’s products commanded less at retail than average brands, according to Headset data.

That could be attributed to the conventional wisdom that consumers are more concerned with product quality and cost – and the elusive concept of “authenticity” – than a famous name printed on the package.

Still, Tyson, a Las Vegas resident, seems to have poured more effort than some into marketing a diverse line of cannabis products, including appearances at MJBizCon.

These include Ear Bites, a cheeky reference to his notorious 1997 heavyweight championship bout with Evander Holyfield, in which Tyson bit off a portion of Holyfield’s ear.