A.Y. Strauss LLC is asking the U.S. District Court of the District of New Jersey to confirm and enter into judgment the significant arbitration victory award it has secured in its representation of Holistic Solutions LLC, the first Black and woman-owned cannabis dispensary licensed in the state, in a dispute with Eastbound Collective LLC and its principals, Patrik Jonsson and Robert Sciarrone, former Curaleaf executives with close associations with Curaleaf founder Boris Jordan (Holistic Solutions LLC v. Eastbound Collective LLC, No. 2:26-cv-13648).
“Our client fought for nearly two years to protect a company that made history in New Jersey’s cannabis market, and a distinguished former federal judge vindicated her on every issue that mattered,” says Robert J. Donaher, Litigation partner at A.Y. Strauss and lead counsel for Holistic. “An arbitration award only means something if it can be enforced. We are confident the court will confirm it.”
The case arises from an investment made by Eastbound in Holistic in 2022 wherein Patrik Jonsson represented that he was the entity’s sole owner. Within months, Jonsson, a former head of Curaleaf’s Northeast region, quietly transferred 70 percent of his investment in Holistic to an entity owned by Robert and Marina Sciarrone, former Curaleaf executives and the son-in-law and daughter of Curaleaf founder Jordan. The transfer was not disclosed as required by law to Nickelson or to the Cannabis Regulatory Commission for more than a year.
After a 14-day JAMS arbitration hearing, retired U.S. District Judge Stephen Orlofsky issued a 107-page opinion holding that Eastbound had broken Holistic’ s operating agreement and violated New Jersey cannabis law. Declaring the transfer null and void, he ruled that that Holistic had lawfully removed Eastbound as a member, and that Eastbound forfeited its entire interest without compensation. He dismissed all twelve of Eastbound’s counterclaims and third-party claims, ruling that every Eastbound claim brought against Ms. Nickelson personally failed as a matter of law. Judge Orlofsky awarded Holistic $1,377,277.55 and Ms. Nickelson $627,650.94 in attorneys’ fees and costs, a total of more than $2 million, with post-judgment interest of 6.5% per year until paid.
To date, Eastbound has failed to comply with the arbitration award.
The federal filing also addresses an issue of importance to the entire industry regarding the enforceability by federal courts of arbitration awards involving state-licensed cannabis businesses.
Under federal law, adult-use marijuana remains a Schedule I controlled substance; however, Holistic’s brief argues that confirming the award would not require any violation of federal law as it concerns company ownership, governance, regulatory compliance, and fee-shifting, not the sale of marijuana. Long-standing Supreme Court precedent holds that lawful contract provisions can be enforced even when they appear in agreements touching on federally prohibited activity. The brief further notes that the respondents never raised an illegality defense in the arbitration in which they actively took part.
“Thousands of state-licensed cannabis businesses rely on arbitration to resolve their disputes,” says Jennifer Cabrera, partner and head of A.Y. Strauss’ Cannabis practice. “If those awards can’t be enforced, bad actors can lose in arbitration and simply walk away.”
In addition to Donaher and Cabrera, the A.Y. Strauss team also includes Alexa Sjolund.
About A.Y. Strauss
A.Y. Strauss provides legal counsel for commercial transactions and litigation in the areas of real estate, construction, employment, cannabis, family law, environmental, and corporate bankruptcy. With the intellectual depth of a large firm and the personalized touch of a boutique, the firm’s lawyers handle a wide variety of matters for emerging businesses, institutional clients, and high-net-worth individuals.