In December 2025, boxing legend Mike Tyson and wrestling icon Ric Flair launched a federal lawsuit against former business partners in their cannabis ventures, accusing them of looting over $1 million and secretly selling intellectual property rights. The 76-page complaint, filed in the U.S. District Court for the Northern District of Illinois, alleges wire fraud, embezzlement, money laundering, extortion, and securities fraud in a scheme that treated their multimillion-dollar company like a personal fund, with plaintiffs seeking $50 million in damages.
Booming Cannabis Market Lacks Oversight
The U.S. cannabis industry hit $38.5 billion in sales in 2024, with projections reaching $76.39 billion by 2030. Celebrity-endorsed brands captured significant market share, including Tyson 2.0, which generated an estimated $150 million in revenue in 2023. The rapid expansion exposed vulnerabilities, particularly at Carma HoldCo Inc., the parent company distributing these products. Founders Tyson and Flair claim they were unaware of financial irregularities until discrepancies surfaced.
Tyson Seizes Control Amid Red Flags
Tyson’s involvement began as a personal redemption arc. After earning over $400 million from boxing purses throughout his career, he faced more than $13 million in IRS debts and financial collapse in 2003. He credits cannabis with easing pain, anxiety, and addiction, expanding Tyson 2.0 to over 20 U.S. states plus international markets like Amsterdam, Barcelona, and Thailand. In April 2025, Tyson stepped in as CEO of Carma HoldCo to steer the company. Shortly after, he detected accounting issues that prompted deeper investigation.
Flair’s Venture Built on Shaky Ground
At age 75-76, Ric Flair entered the space after meeting Chad Bronstein at a Tampa marina. Long reliant on Xanax for anxiety, Flair turned to edibles for better sleep and to reduce dependence on prescription drugs. His lines, Ric Flair Drip and Wooooo! Energy, promised late-career stability. The lawsuit contends Flair lacked true control or majority ownership from the start, with deals struck behind his back after Carma acquired Ric Flair Drip in September 2022.
Detailed Allegations of Misconduct
The suit outlines a RICO conspiracy involving four defendants and 21 counts. It accuses executives of diverting tens of millions through unauthorized licensing and asset transfers. Specific misuse topped $1 million on private jets, yacht expenses, home renovations, mortgages, and luxuries including a $15,000 watch for Los Angeles Rams coach Sean McVay, Gucci items, and a home theater system. Bronstein allegedly sold Flair’s IP rights to LGNDS for $400,000, covering hemp, mushrooms, nicotine, kava, smelling salts, beverages, and apparel without approval.
Further Claims and Defense Responses
Additional accusations target CEO Adam Wilks for hidden kickbacks from vape maker DomPen, which used Carma IP without permission, and Bronstein for an unauthorized AEW sponsorship for Wooooo! Energy that triggered a breach-of-contract penalty paid by Carma and LGNDS. Post-termination in 2023, Bronstein launched competing projects like Real American Freestyle with Hulk Hogan and Real American Beer, allegedly using Carma secrets. Chief Legal Officer Nicole Cosby faces claims of enabling Bronstein’s personal stakes and faulty IP oversight. Defendants’ lawyers dismissed the suit as meritless fiction aimed at shakedown settlements, vowing to fight in court.
RICO Stakes and Broader Impact
Invoking RICO elevates the case, requiring proof of repeated racketeering like wire fraud. Success could triple $50 million damages to $150 million plus $10-20 million in fees. The dispute unfolds amid federal cannabis rescheduling developments, as President Trump signed an executive order in December 2025 directing the DOJ to expedite rescheduling cannabis from Schedule I to Schedule III, which Tyson praised as a practical policy shift. Despite litigation, Tyson 2.0 expanded into Maryland and Pennsylvania via TerrAscend in November 2025, while Flair’s brands maintain retail growth. A ruling could enforce stricter fiduciary duties and IP safeguards in celebrity ventures, influencing investor scrutiny and participation as the industry matures. Courts may clarify protections, with discovery likely to reveal more on governance lapses.
Sources
Mike Tyson, Ric Flair Sue Ex-Partners in Weed Business for $50M. Front Office Sports, December 23, 2025
Mike Tyson Takes Weed Partners to Court, Alleging Fraud and Self-Dealing. New York Sun, December 23, 2025
Mike Tyson Named CEO of Carma HoldCo, Signaling Bold New Chapter for Portfolio of Lifestyle Brands. Cannabis Business Times, April 17, 2025
Federal Marijuana Rescheduling: Process and Impact. Moritz Law Center, Ohio State University, January 2, 2026