A recent lawsuit by Curtis Heffernan, the former President of Ignite filed by attorney Tamara Freeze has pulled back the curtain of the inner working at Ignite, Dan Bilzerian’s cannabis company which is a publicly traded company.

Tom Nash, a MBA and financial analyst has done a few videos on the subject and highlighted some interesting and eye opening accounts gathered from the Heffernan lawsuit and corporate financial filings of the publicly traded company.

Tom Nash points out that Paul Bilzerian, Dan’s father and convicted felon related to securities law violations with an outstanding $62 million dollar fine from the SEC (Securities and Exchange Commission) may actually be the real mastermind behind the enterprise.  This can present serious legal problems for Ignite which was knowingly working with the convicted felon without disclosure.  Plus, it may present legal problems for Paul Bilzerian if there were any SEC violations for his involvement with the publicly traded Ignite.  All of this cannot leave Dan Bilzerian unscathed as the CEO of the company.

Nash also points out that Ignite spent heavily on marketing and advertising and at times the company appears to be paying for Dan Bilzerian’s personal expenses.  In trying to present a balanced view, most startups will spend heavily on advertising and marketing in order to gain market share in a competitive field such as cannabis.  Also, it is questionable whether having millions of Instagram followers will necessarily translate into sales.  Nash also does a great analysis of comparing revenues and expenses of the companies comprising the Marijuana Index and contrasting them against Ignite.  Again, this may not be the best barometer into the matter because the other companies may be bigger and more established.

The Heffernan lawsuit also points out some financial improprieties such as trying to recognize PPP loans as revenue which further brings into question why a cannabis company was able to receive taxpayer funded PPP loans.  To compound matters, these financial schemes will also bring further scrutiny from the SEC.

Overall, things are not looking good at Ignite, revenues may not support the going concern, financial improprieties, convicted SEC felon Paul Bilzerian pulling the strings behind the scenes, and Dan Bilzerian using the company as his personal piggy bank may bring this house of cards crashing down.

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