An American bank sued a cannabinoid manufacturer and the founders of that company for not repaying a $1 million loan. Hemp-friendly First-Citizens Bank & Trust Co. filed the suit against MC Nutraceuticals, its founders, Jeff Worley and Bret Worley, and related MC entities.
This case was filed with the U.S. District Court for the Southern District of Texas alleging that the defendants, including the owner, failed to repay a loan made in September 20,23.
This legal dispute is just the latest of a long list of challenges that has been facing the U.S. Hemp sector, which includes some of its most prominent cannabinoid manufacturers. It also highlights the dangers of allowing the market to be unrestricted for hemp-derived intoxicants such as delta-8THC and other synthetics.
The pressure on companies that use the model of intoxicating hemp is increasing as Washington policymakers continue to review federal hemp laws.
Legal pressure
MC Nutraceuticals is involved with affiliated companies in a series of lawsuits over non-payments, broken contracts and regulatory oversight, such as:
- Asterra Labs contract dispute – claims and counterclaims regarding unpaid bills and allegations of misconduct
- Separate action by American Express against a MC-affiliated entity
- Colorado Authorities reach settlement over claims about products and product compliance
The cases together point out a familiar pattern of aggressive business tactics and financial stress in the shady hemp industry.
Business Model
MC Nutraceuticals describes itself as the “largest global supplier of cannabisoids” with its roots in Colorado, and Texas operations. In 2020, the Worleys started the business following passage of Farm Bill 2018 In the beginning, it focused on distillations and isolates of CBD in bulk for other manufacturers and brands. MC, like many other producers that suffered a brutal contraction in the CBD market of early 2020, shifted into the synthetic intoxicants delta-8 THC HHC THCa and THCa when those markets emerged.
MC also offers custom-blended blends of live resins, infused material and custom-made materials for edibles, vapes and other products. Vivimu, its retail affiliate brand, extends this reach to direct-to consumer channels.
The company operates as part of a larger network that includes MC Global Holdings and MC Distribution.
What if you could get a $1M loan by the year 2023
First-Citizens in North Carolina has lent money to niches and new sectors including hemp. The bank has grown steadily by acquiring companies during the wave of regional consolidation, positioning it as a credit provider in areas that traditional lenders are cautious about.
This context brings up a fundamental question: Why a $1,000,000 loan in 2023 to a producer of cannabinoids, when the regulatory uncertainty surrounding intoxicating hemp-based products is well known? By then, the market for delta-8 and similar compounds was widely recognized as operating in a gray zone – one that federal lawmakers had already signaled they intended to close.
Sector risks
After federal legislation in 2025, the unfolding lawsuit highlights the deeper structural issues in hemp intoxication. This marked the start of the end of this segment. Before a nationwide ban is set to go into effect by the end of 2018, states have taken uneven steps to limit or ban these products. The result has been a patchwork that makes interstate compliance and commerce difficult.
A legal loophole within the 2018 Farm Bill allowed the market to grow rapidly for these unregulated products. Some shady manufacturers used this to transform hemp-derived compounds to synthetic high-producing substances, which are available widely in certain states. They are also often sold to children as knockoff brands that mimic popular sweets.