National Cannabis Firm Tied to Maine Pot Czar Faces Whistleblower Allegations, Including of Illegal Diversion

Note: This story was updated after publication to include comments from a law firm representing Metrc who asked to be described as a Metrc spokesperson.

A former executive at Metrc, Inc., a major provider of cannabis tracking systems that is active in Maine, has filed a federal whistleblower lawsuit accusing the company of enabling illegal marijuana diversion and retaliating against him after he raised concerns about the alleged practice internally.

The lawsuit could have serious implications for Maine, where Office of Cannabis Policy Executive Director John Hudak is already facing a Government Oversight Committee investigation for his own ties to Metrc, as well as for several contracts the firm holds with the state. The probe, unanimously approved by the committee in February, centers on Hudak’s past business relationship with a Metrc executive and his role in negotiating a lucrative contract amendment between Maine regulatory office and the company.

In a 21-page complaint filed April 4 in U.S. District Court in Oregon (see below), Marcus Estes alleges that Metrc and its subsidiary Metrc ID, LLC fired him after he reported what he believed to be evidence that the company was “participating in a conspiracy” with California cannabis regulators to allow the flow of cannabis into the illicit market.

[RELATED: Maine Cannabis Chief Investigated Over Potential Conflict of Interest with METRC…]

Estes, who was hired as an executive vice president after Metrc acquired his blockchain tracking startup in 2023, claims the company’s flagship “radio-frequency identification” (RFID) tracking system fails to meet contractual obligations to flag irregularities in cannabis distribution—a core safeguard required under California law.

According to the complaint, Estes came to believe that Metrc “was essentially providing cover” for illegal distribution operations known as “burner distros,” which use legitimate licenses to buy cannabis legally and then sell it illicitly, often across state lines.

Marijuana business owners have frequently told the Maine Wire that Metrc is known within their community to be vulnerable to exploitation and subversion by illicit operators, even as regulators have presented Metrc’s services as a safeguard against black market cannabis trafficking.

“Metrc is well aware of the DCC’s failures and simply keeps quiet about them in order to maintain their plum position and their contract worth more than $40 million per year,” the complaint alleges, referencing California’s Department of Cannabis Control. Estes contends that Metrc’s system “does nothing to flag irregularities” and that the company benefits from the status quo, which is “at the expense of the cannabis industry in general.”

[RELATED: “Fire John Hudak”: Maine’s Cannabis Businesses Gather in Augusta on Eve of Legislative Session…]

Estes claims he informed his supervisor at the company of these concerns in June 2023, following a meeting with a California cannabis operator who described how easily Metrc’s system could be exploited to enable diversion.

“I wouldn’t talk to anyone about this,” Estes recalls his supervisor responding, adding that “flagging irregularities ‘was not our job.’”

Following this exchange, the complaint alleges, Estes was stripped of his responsibilities, excluded from key product meetings, and ultimately terminated in March 2024—just nine days before his stock options were due to vest.

Estes says he was never provided performance evaluations, formal discipline, or the incentive bonus outlined in his employment contract. “Estes was in all respects an exemplary employee,” the complaint states, adding that he achieved “a near 100% success rate” in client sales and brought in new business from major cannabis brands.

[RELATED: Maine Pot Czar Admits State Is Licensing Foreign Criminal Orgs to Grow Cannabis, Says Hands Tied…]

The complaint also raises concerns about Metrc’s handling of its acquisition of Estes’ former company, Chroma Signet, alleging the deal was structured through a shell company to avoid scrutiny from state regulators. Estes alleges Metrc CEO Michael Johnson told him “some of Metrc’s state contracts forbid Metrc from selling to marijuana licensees” and that the acquisition was intentionally concealed.

[RELATED: Deputy Finance Director Admits to Withholding Data from Maine Lawmakers…]

Estes is seeking reinstatement, compensatory damages of up to $1.5 million, and a permanent injunction preventing Metrc from retaliating against whistleblowers. He also notified the court of his intent to seek punitive damages and attorney’s fees.

The lawsuit is Marcus Estes v. Metrc Inc. et al., Case No. 3:25-cv-00556, and remains pending in the U.S. District Court for the District of Oregon.

“While normally we would not comment on ongoing litigation, these claims are so baseless that they warrant a response,” a Metrc spokesperson told the Maine Wire.

“This former employee was let go due to performance issues and, in response, he engaged in a retaliatory campaign against the company that required Metrc to take active steps to protect its systems and customers. This lawsuit is just a continuation of this former employee’s campaign of retaliation, and the falseness of these claims will be proven in Court,” the spokesperson said.

Hudak, who assumed leadership of Maine’s OCP in 2022, co-founded Freedman & Koski, Inc., a consulting firm that advised Maine on its marijuana legalization efforts before he took the state position. His former business partner, Lewis Koski, now serves as Metrc’s chief strategy officer. Critics of the arrangement, including Rep. David Boyer (R-Poland), have argued that Hudak should have recused himself from negotiations with Metrc due to this connection and the appearance of a conflict of interest.

In 2023, Hudak oversaw an amendment to Metrc’s contract that increased its value to $890,000, expanding the company’s role in providing seed-to-sale tracking for Maine’s cannabis industry.

Boyer has questioned whether Hudak negotiated impartially, asking the oversight panel: “How can Mainers trust that he got the best deal for taxpayers with his former business partner on the other side of the table?”

The contract is now up for renegotiation, with Hudak reportedly pushing to include Maine’s medical cannabis caregivers in the tracking system.

Hudak has argued that expanding Maine’s business relationship with Metrc would help fight back against illicit marijuana cultivators, including the black-market Chinese pot traffickers whom Hudak has previously admitted to licensing.

The claims of the new whistleblower lawsuit, however, seem to undercut the idea that Metrc is the antidote to illicit cultivation and regulatory circumvention.

Hudak has consistently denied any financial ties to Metrc.