Knobel Sues Brownstein Over Native Roots Deal

Peter Knobel alleges a Denver law firm's flawed settlement agreement blocked a $190 million sale of Native Roots Cannabis Co.

Updated on Nov. 5, 2026 in Professional Services

Wide photograph of a weathered stone civic building in Denver with broad steps in warm late-afternoon light under a pale blue sky. — Peter Knobel sued the Denver law firm Brownstein and attorney Steven Demby on Monday, alleging a flawed settlement blocked a $190 million Native Roots sale. AI Illustration. Upload story photo >

Peter Knobel sued the Denver law firm Brownstein and attorney Steven Demby on Monday, alleging legal malpractice and breach of contract. The suit blames a settlement agreement tied to a dispute over Native Roots Cannabis Co. for blocking a $190 million sale.

Why it matters

The lawsuit puts the drafting of a settlement agreement between cannabis company owners under legal scrutiny, with Knobel claiming the resulting deal cost his entity $100 million. It shows how the terms of an owner dispute can carry large financial consequences years later.

Knobel's suit cites a proposed $190 million sale of Native Roots Cannabis Co. that allegedly cost his entity $100 million. The dispute between the parties has lasted about 8 years, and the claims remain unproven allegations.

The players

Peter Knobel

Knobel is the plaintiff and head of holding company Brightstar, which he says was harmed by the blocked sale.

Brownstein

Brownstein is a Denver law firm named as a defendant in the malpractice suit.

The details

Knobel alleges the 2018 settlement agreement between himself and the other owners of Native Roots was shoddily drafted. That agreement required hiring an investment banker to sell the company to resolve a feud with minority owners Josh Ginsberg and Rhett Jordan.

2018: Owners agree to a sale process to settle their feud over Native Roots.
Monday, November 2, 2026: Knobel files the malpractice and breach of contract lawsuit.

Market Landscape

Ownership feuds among cannabis operators have repeatedly complicated exits and sales in a sector where investor agreements are often negotiated under regulatory uncertainty. Knobel's case shows how a single settlement term can ripple into a multimillion-dollar dispute.

Owners of closely held businesses, including cannabis companies, may face long-running legal exposure if settlement terms are unclear. Anyone entering a multi-party sale or shareholder agreement should confirm the drafting with independent counsel.

The takeaway

Clear, carefully drafted settlement terms can prevent a shareholder feud from turning into a lasting financial and legal fight. Business owners should treat sale-process agreements as high-stakes documents.