Producers of 420TV Online Pot Channel Sued by Investor

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A legal fight has flared up between the financier of 420TV — billed as the first digital network devoted to cannabis culture — and the company that is producing and distributing the marijuana-themed channel.

The network’s backer, Genesis Media, has sued Ownzones Media Network over a dispute about the funds used to launch 420TV. Genesis provided $3.1 million to Ownzones to produce pot-related programming under an agreement struck last year. According to the lawsuit, Ownzones and CEO Dan Goman failed to account for how the money was used and also low-balled the budget required to get 420TV’s planned slate of nine original series off the ground.

“[D]efendants Ownzones and Goman displayed willful misconduct and gross negligence in their performance by, among other ways, commingling Genesis’ funds with Ownzones’ funds and showing a conscious and voluntary disregard of the need to use reasonable care in the management of the project,” Genesis said in its legal complaint.

Now Genesis is alleging that Ownzones has “hijacked” 420TV by refusing to relinquish the domain name and intellectual property for the weed channel.

Genesis Media’s principal investor is Howard Misle, a Las Vegas-based entrepreneur who has interests in medical marijuana cultivation and distribution companies, including ACC Enterprises, Cannabis Operations and Consulting Group Inc. and Cannabis Management Co. of Nevada Inc.

In a statement, Goman said the claims by Genesis are without merit. A rep for Ownzones said the parties are currently engaged in talks to settle the dispute.

“Ownzones Media Network delivered a world-class and quality OTT programming service in 420TV, which was supported by a dedicated group of top entertainment industry professionals both in the technical and production areas,” Goman said in a statement. “Las Vegas-based Genesis Media’s Howard Misle’s claims are without merit, and we will not otherwise comment regarding active litigation.”

Genesis is demanding return of the $3.1 million it originally paid Ownzones (plus interest); at least $14 million in compensatory damages; and unspecified punitive damages. The investor also is seeking the return of the 420TV.com domain name and related intellectual property through the legal action, which was filed last month in California state court in Los Angeles.

Originally, Ownzones was shooting to launch 420TV in September 2017 but the company “unreasonably delayed the launch date until February 2018,” Genesis alleged in the lawsuit.

According to Genesis lawsuit, Ownzones had agreed to produce all media content for 420TV and asked for an annual budget of $4 million to be paid in installments for production, marketing and promotion. That number “was soon cast out to be unreliably low after the first installment and Ownzones asked for an additional budget,” according to Genesis Media. To date, original programs Ownzones has produced for 420TV include “Medical Marijuana Miracles,” “Cannabiz” and “In Amsterdam.”

On April 18, 2018, Ownzones informed Genesis Media that it would no longer be producing content for 420TV and instead would be providing technical services for the channel.

When Genesis asked Ownzones to deliver financial info related to 420TV, Ownzones said it had spent $1.5 million of the money it received from the investor but “was unable to deliver accounting statements due to commingling of funds,” according to the investor. Genesis notified Ownzones of the termination of their deal on May 4. According to Genesis’ lawsuit, Ownzones has refused to cede control of intellectual property, for the venture including the 420TV.com domain name.

The digital network’s name is a reference to 4:20 p.m. — the time of day pot enthusiasts have observed for toking up — as well as April 20, which has become an unofficial weed holiday around the world. Another party to the 420TV venture is Alex Nahai, a former Hollywood agent who runs his own entertainment and branding company.

By: Todd Spangler, Variety

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