Duo sue over failed medical marijuana project in Vegas

Local businessmen sue former lawyer, seek $9 million in anticipated profits

Two Singaporean businessmen invested US$750,000 in a proposed medical marijuana project in Las Vegas, but the plan went up in smoke and the facility was never built.

Mr Colin Chew, 44, and Mr Marcus Lim, 43, have sued former lawyer Then Feng, 39, who had approached them with the proposal, for misrepresentation and breach of contract.

The pair is seeking US$6.8 million ($9 million) in profits they said they would have made from their investment if the proposed facility came to fruition and assuming it operated for at least two years.

Mr Chew and Mr Lim are also seeking the outstanding balance of US$141,120.30 of their investment. Mr Then has repaid the rest of the money.

The case opened in the High Court yesterday for a three-day hearing.

The duo's lawyer, Mr Alfred Lim, said in his opening statement that in April 2014, Mr Then presented them a proposal to set up a facility in Las Vegas, Nevada, to cultivate, produce and dispense marijuana, or cannabis, for medicinal use.

A British Virgin Islands company, Mary Jane Investments (MJI), was set up by Mr Then as the vehicle for the project. Mary Jane is slang for marijuana.

At the time, Mr Then, a Singaporean, was a foreign-registered lawyer practising in the Singapore office of international law firm Walkers.

Mr Chew and Mr Lim alleged that Mr Then had told them medical marijuana establishments are permitted in certain districts in the state of Nevada.

They said Mr Then told them a 100,000 sq ft facility would be built and that the total start-up costs was estimated at US$1.48 million.

They said Mr Then told them the facility would be "highly profitable" as it was equipped to produce four harvests a year, amounting to a net profit of US$10 million a year. The profit was to be paid to various investors based on their proportionate shareholding in MJI.

Mr Chew invested US$250,000 for 25 shares between June and November 2014, while Mr Lim put in US$500,000 between November 2014 and December 2017 for 50 shares.


They said Mr Then gave them periodic updates regarding the construction progress.

Between November 2014 and January 2016, the duo made four trips to Las Vegas and met with Mr Then's business associate Edward. On each visit, they did not see any construction work being done.

Mr Then said Edward, a Nevada resident, brought the project to his attention and asked for his help to get funding. The project involved 13 other investors including himself, he said.

Mr Then argued that a valid legal action for misrepresentation must involve a false statement of existing or past facts.

However, many misrepresentations alleged by the pair relate to future events and do not amount to "actionable misrepresentations". Mr Then said these arguments are "legally and factually flawed" and there was no such agreement.