INNOVATIVE HEALING SOLUTIONS v PARAGON ET AL

Dale Schafer Esq

5/13/2025

Original High At 9 News Article

A CONTRACT DOESN’T STOP BAD BEHAVIOR BUT IT MIGHT

PROTECT YOU LEGALLY

A dispute has developed in Ohio between Innovative Healing

Solutions, LLC (Innovative), a licensed cannabis processor, and

Paragon Development Group, LLC (Paragon), a licensed

cultivator, and two owner/managers, over the delivery by Paragon

to Innovative of flower and trim that turned out to be hot hemp, or

contaminated biomass, in violation of Ohio cannabis rules.

Innovative had its license suspended because of the bad biomass

and now wants Paragon to pay at least 1.5 million dollars to

compensate for the problem.

According to the complaint, Paragon had delivered compliant

biomass several times in 2024. Biomass, under Ohio law,

includes flower, trim, and shake. Hot hemp is not lawful to be

introduced into the cannabis supply chain. Biomass contaminated

with biologicals or pesticides are not allowed in the cannabis

supply chain either. Additionally, biomass that has been fresh

frozen can not be remediated if it contains contaminants so it is

basically useless. To ensure that the biomass rules are followed,

a manifest, entered into the METRC track and trace system, must

accurately reflect the actual product being delivered. The manifest

must also include testing results to confirm the product is what it

is represented to be and free from contaminants.

Innovative alleges that there were three deliveries from Paragon

that violated Ohio cannabis rules, and that two owner/managers

of Paragon, Jason Wilson (Wilson) and Mark Nelson (Nelson)

made the deliveries knowing the manifests were false and

products were contaminated. These deliveries occurred between

January and March of 2025.

The first illegal delivery was on January 24, 2025 for 335 pounds

of biomass with a manifest stating the material was contaminant

free. The biomass had been fresh frozen. There was an additional

25 pounds not on the manifest and when questioned, Wilson

claimed he had talked with the head of the state cannabis control

agency, the DCC, and that the biomass was within the 10%

variance allowed in the rules. It is alleged this information was

knowingly false because the biomass was contaminated and the

25 pounds was hot hemp. It is alleged both Wilson and Nelson

knew the information was false.

The second illegal delivery was on February 6, 2025, when 215

pounds of biomass arrived with a clean manifest. Further testing

confirmed that there was hot hemp and contaminated biomass

included in the delivery. Innovative alleges both Wilson and

Nelson knew the biomass violated Ohio cannabis rules.

The third illegal delivery occurred on March 5, 2025. Wilson

arrived with approximately 25 pounds to replace the prior hot

hemp biomass plus an additional 100 pounds not ordered. Wilson

claimed that the managing partner of Innovative had approved the

extra 100 pounds. Innovative alleges that the biomass was hot

hemp and contaminated, and that the managing partner had not

approved the extra biomass. The complaint alleges that both

Wilson and Nelson knew there was no approval of the extra

biomass and that the biomass was contaminated.

Because of the failed testing, the presence of hot hemp, and the

violations of the METRC and manifest rules, Innovative had its

license suspended.

The complaint against Paragon sounds in fraud, breach of

contract, and violation of Ohio law. Innovative seeks at least 1.5

million in monetary damages, plus the loss of profits, testing

costs, cleanup costs, and damage to equipment from the hot

hemp. The essence of the complaint is that Paragon, Wilson, and

Nelson breached their contract with Innovative by knowingly

selling non-compliant biomass, using false testing and manifests,

and lying about conversations with critical people. The claims are

fraud, negligent misrepresentation, negligence per se (violation of

law), breach of contract, conversion, theft by deception, and civil

conspiracy. The lawsuit is just getting underway so these are the

allegations of Innovative. Paragon, Wilson, and Nelson will have

their opportunity to respond and their position will come out.

This should serve as a cautionary tale. A good contract can help

you seek damages and hopefully be made whole, should bad

things happen. However, a contract is just a piece of paper, and

that will never stop humans from lying, cheating, or stealing from

you. Even with a good contract, you must be vigilant against

malignant people.