QUINCY — Trulieve filed a libel suit in Gadsden County Friday against Grizzly Research, a short-sell company that posted a scathing report about the state's largest purveyor of medical marijuana.

The Dec. 17 report alleged the company over-inflated the value of its crops, rigged the political system to get its medical marijuana license somehow, and failed to disclose ties to an ongoing federal corruption probe that involves the spouse of the company's CEO.

Immediately after the report was made public, Trulieve's stocks took a one-day 23 percent nose dive to a low of $9.18 on the Canadian Securities Exchange (CSE). Just as the stock was beginning to recover to previous levels, it dipped again after investors filed a class-action lawsuit against the company. It closed at $10.10 Friday.

"This lawsuit represents Trulieve's firm stance against such false and misleading reports," CEO Kim Rivers said in a statement posted on its website Friday night. "We will work tirelessly to fight back against these fraudulent claims in a legal setting."

"We will protect our brand by ensuring that the trust between Trulieve and its shareholders, as well as customers, is never called into question."

A complaint in a lawsuit tells one side of a story. The suit also names GeoInvesting, LLC, a financial research and investment firm based in Pennsylvania, and Siegfried “Siggy” Eggert, an employee of GeoInvesting, who wrote the report.

Relying partly on drone footage, the Grizzly report tries to make a case that Trulieve misled investors to think its assets were worth more than they actually were, thus inflating the company's profits. The report said most of its product was low-grade marijuana grown in what are called hoop houses.

The report also said Trulieve failed to disclose real estate transactions and construction contracts worth millions of dollars with John "J.T." Burnette, who is married to Rivers and has been charged in a federal corruption probe in Tallahassee. Rivers has not been charged with any crime.

More:J.T. Burnette faces new allegations as DoubleTree Hotel is dragged into public corruption probe

The company issued a four-page statement on its website that provides a point-by-point refutation of the Grizzly report, which provides the basis of the investor lawsuit claims.

Among other things, Trulieve said people associated with Grizzly trespassed on its properties to capture drone footage and didn't contact company officials.

The Gadsden County sheriff's office was contacted and people were issued trespass warnings. They are identified in the libel suit as Florida residents Scott A. St. John and Jean-Joseph W. Lindor Jr.

Trulieve said it didn't know what the basis of the allegations were, since its sworn financial statements filed with the CSE disclose the real estate transactions and construction contracts.

The company also said it notified the board of directors when Rivers was served with a subpoena related to the FBI investigation and determined there was no connection to Trulieve.

Any notion that Trulieve rigged the political system is "absolutely false and we consider these statements libelous," it said in a statement.

Also, the company said it has 1.7 million square feet of cultivation facilities, of which 1.1 million square feet are green houses, or hoop houses used to grow cannabis for oil extraction, which removes impurities. All smokable flower is grown and harvested at indoor, state-of-the art facilities, Trulieve said.

Grizzly Research is a short-sell consultant that produces negative reports on companies to drive down the value of their shares so investors can then pick them up on the cheap and resell when the stocks go up in value again.

Learn more:What is Short Selling? | Fidelity

Its website admits that the company is biased and has a disclaimer that it "stands to profit in the event the issuer’s stock declines. We may buy, sell, cover or otherwise change the form or substance of its position in the issuer. GRIZZLY RESEARCH LLC disclaims any obligation to notify the market of any such changes."

Motley Fool, the private, online investment adviser, has said investors should ignore Grizzly Research's report for several reasons: Trulieve has audited financials, the report is based on circumstantial evidence, and the report is inherently biased.

It has published negative reports on other companies, including New Age Beverages, which makes CBD-based drinks.

“The report makes many connections that are loose at best,” Motley Fool said. “Without inside information, its claims lack concrete evidence, and that's what investors should be focused on.

"The short-seller report is based on many assumptions and it can be dangerous for investors to make any buying or selling decisions based on these inferences."

Contact Jeff Schweers at jschweers@gannett.com and follow him on Twitter @jeffschweers.

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