Aeron Sullivan and his girlfriend, Alana Bennett, were waiting for the LSD to kick in. It was February 2016, and they were in a remote part of Alaska, watching the skies, eager for the shimmering colors of aurora borealis to start dancing. Once the acid hit and their pupils went wide, an urgent question occurred to Sullivan: Who is leading the human race?
Sullivan had no answer. No one is in charge, and humans are just bumbling around, he thought. He and Bennett went inside their cabin, when something seemed to suck the air out of the room and a heavy pressure, like a doubling of gravity, weighed him down. He sensed a divine being had joined them.
He couldn't see the entity, but he felt a mind-to-mind connection as it deposited what Sullivan describes as the wisdom of the universe into his mind. Sullivan asked the presence its name and it answered telepathically.
"Just like you are Aeron, just like she is Alana, just like you are a man and she is a woman, I am, I am," Sullivan remembers the divine being saying. "I am the I am. I am who I am. I am who I will be; I am."
At that moment, Sullivan says, he knew he was communicating with God. Sullivan was an agnostic, but that washed away as the presence, which referred to itself as Yahweh, the ancient Hebrew name God used when talking to Moses, spoke with him over the next five and a half hours. Sullivan paced the room, having what he calls an "existential disconnect with reality" during a "schizophrenic discussion" with the unseen being. Yahweh explained to Sullivan that He had a big, impossible, yet perfect plan for Sullivan's life. All Sullivan had to do was trust in Him.
God's plan for Sullivan would clash with his role as the visionary co-founder of Tradiv, a promising marijuana startup that liked to say it was building the "Amazon of the cannabis industry" in Colorado's burgeoning market. Tradiv allowed state-licensed growers and dispensaries to buy and sell marijuana products from one another online. By March 2016, Tradiv, which Sullivan had co-founded with Geoff Doran in April 2015, was hosting millions of dollars in legal marijuana sales between 230 growers and dispensaries. By June, Sullivan was named to Inc.'s 30 Under 30 list.
Less than a year and a half later, Sullivan would quit to pursue a more religious life. A new CEO would lead the company to virtually abandon its successful niche in Colorado to bet big on California's wilder weed ecosystem--and board members say, spend over $1 million failing to crack that market. The coup de grace was delivered in a former employee's lawsuit, which alleged that she was wrongfully terminated after Doran had sexually harassed her. This December 13, board members decided that Tradiv, short on funds, couldn't withstand those legal costs and voted to dissolve the company.
The tech boom has given us tales of companies that got huge despite poor management. (Mark Zuckerberg once famously described Twitter as a "clown car that drove into a gold mine.") Tradiv's story, colorful as it may be, shows why the vast majority of companies find it hard to overcome bad decisions and setbacks. "Tradiv was the darling of the industry, with a leader"--Sullivan--"investors loved to love," says a still-stunned Emily Paxhia, the co-founder of Poseidon Asset Management, which has spent $25 million funding cannabis companies, including Tradiv. "Losing is part of investing, but this was bad. It was crazy."
Real people and real money
Sullivan and Doran, who'd met as fraternity brothers at Drury University, launched Tradiv in April 2015 through the Boulder, Colorado-based accelerator CanopyBoulder. While medical cannabis was legalized in Colorado in 2000, and recreational sales followed in 2014, black-market ways of doing business persisted--meaning growers and dispensaries had to navigate a convoluted terrain of relationships, pot brokers, phone calls, and furtive meet-ups. All parties needed a better way to do business. Enter Tradiv, with a platform that enabled legal marijuana businesses to buy and sell with the click of a mouse.
Sullivan--his first name is pronounced "Aaron"--started Tradiv two days after a stint as a captain in the Marines, and interest in the startup quickly spiked. By November 2015, Doran and Sullivan had raised $2 million and hired 10 employees. Sullivan was CEO, but he had never run a business before, and he asked the board to hire a more experienced executive to replace him. In January 2016, Sullivan became executive chairman and Todd Palmieri, who had previously sold a software company called Expensewatch.com to Jeff Bezos's investment firm, was named CEO.
As executive chairman, Sullivan was still involved in operations, but his primary focus was raising money; ultimately Tradiv pulled in $3.4 million from Poseidon, Anslinger Capital, Sand Hill Angels, and CanopyBoulder, among others. (According to fundraising documents obtained by Inc., one of its major investors sent money through a shell company in the British Virgin Islands.) But the pressure was building. "Suddenly," says Doran, "Sullivan realized he was responsible for real people and real money. It was overwhelming."
Sullivan returned from Alaska engaged to Bennett, a month from turning 30, and newly enlightened that God had a grandiose, if still vague, plan for his future. Once back at Tradiv, he found that his priorities had shifted. He was now disillusioned with the "dogma of capitalism," Sullivan says, and realized Tradiv's goals--to sell as much weed as possible at the lowest possible price--did not square with what he experienced in what employees would come to refer to as his "burning bush moment."
"I started to ask myself, 'What does it mean to live a good life?'" says Sullivan. "I realized I had to find a real purpose, and I found when you live according to God, who teaches to love people unconditionally, it sets you free from the matrix." (By "matrix," Sullivan explains, he means a reality or worldview that does not include God.)
Sullivan called a meeting and told his employees, in a matter-of-fact tone, what he'd experienced in Alaska and how he now wanted to do good and follow God's will, says Jason Coleman, the former sales director of Tradiv. Some employees thought Sullivan was just trying to inspire the troops. But a few went to Doran and Coleman to voice concerns that their charismatic leader had said he was having conversations with God.
"I hope you die"
Other problems were surfacing at Tradiv. According to a wrongful-termination lawsuit filed in May 2016 by the company's former chief marketing officer, Lisa Buffo, Tradiv had a toxic and sexist culture. Other employees, executives, and investors deny that was the case. But an amended lawsuit Buffo's lawyer filed in March 2017 alleges that Doran, as co-founder and vice president of Tradiv, used his position to engage in "atrocious sexual harassment and sex discrimination" against Buffo. Buffo's lawsuit also alleges that Palmieri and Sullivan both knew about Doran's conduct but did nothing to stop it. (Sullivan denies this. Repeated calls and emails to Palmieri were answered by an email address appearing to belong to his wife, Dora Palmieri; replies from that address stated that Palmieri is seriously ill and explained that he won't comment for this story because litigation is still pending.)
Buffo and Doran had met at CanopyBoulder--the accelerator from which Tradiv launched, and where she worked as marketing coordinator. There, her lawsuit alleges, Doran "preyed" on Buffo and "lured" her into a job at Tradiv as chief marketing officer by offering her equity. Doran, who was 32 at the time, and Buffo, who was 25, had what the lawsuit describes as a brief "fling" in the fall of 2015. (Doran says Buffo was his girlfriend, and said they disclosed the relationship when she was hired.) Buffo alleges that after she told Doran she did not want to have a serious relationship, her suit alleges he texted her saying that he had spoken with Sullivan and that she "was done." He followed up with "I hope you die you fuckin c--t," the lawsuit claims. Current and former Tradiv employees and board members say they were aware Buffo and Doran were in a relationship, but that they never witnessed inappropriate behavior.
On December 31, 2015, Buffo alleges that she and Doran had an argument, after which he stood outside of her apartment leaving angry voicemails and text messages before ramming his car into hers. Doran said he can't comment on specific allegations since the case is still pending, but he broadly denies engaging in sexual harassment and sex discrimination. A Tradiv executive who insisted on anonymity says that Doran was not fired or disciplined because the company's attorney and board looked through Doran's texts and emails and decided it was a personal matter.
Going to California
Sullivan was Tradiv's visionary leader, but Palmieri had some ideas of his own for the company. In March 2016, Palmieri told employees that Tradiv would expand to California before the state voted to legalize recreational marijuana, and that he would move headquarters to San Diego in April. Buffo was told, according to her lawsuit, to go out to California to find the company new offices.
But before the company moved, an argument erupted between Buffo, Sullivan, and Palmieri over her equity agreement. Buffo claims a restricted stock purchase agreement Palmieri asked her to sign then did not match what she negotiated with Sullivan before accepting the job. On the day before Buffo expected to move to California, she was summoned to a conference call with Palmieri and Sullivan. In a curt, three-minute conversation, Buffo's lawsuit alleges, Palmieri told Buffo that Tradiv was "going in a different direction with marketing" and she was terminated, effective immediately. Sullivan says Buffo was fired because she sought advice on her stock agreement negotiation from a lawyer who had been working with a potential Tradiv investor, a move Sullivan said hurt Tradiv.
Once the company moved--leaving just one employee behind in Colorado--Palmieri nearly doubled the staff. A new crop of salesmen were hired. The company's marketplace software model was successful in Colorado's strictly regulated market and now the company seemed primed to take advantage of an expected expansion of the market in California, where voters were widely expected to approve a ballot initiative legalizing recreational marijuana. (That initiative passed in November 2016.)
Tradiv had been a business that never physically handled marijuana. Investors favor such businesses, because marijuana is still technically banned under federal law. But Palmieri began using the company's capital to transform Tradiv into a full-fledged distributor: leasing two warehouses, buying two delivery vans, and bringing on two full-time drivers, says Ben Madden, who was hired as Tradiv's director of distribution. In Colorado, buyers and sellers on Tradiv's platform took care of delivery and payment. But in California, Tradiv facilitated the transactions and also physically handled both marijuana and payments. That meant Tradiv had to buy the product from the growers and drive long distances to the dispensary owners. And, as a new player in the country's oldest and biggest pot market, Tradiv didn't have bargaining power, so profit margins were slim.
"It took spending a couple million dollars to find out our product was not a good fit for California," says Madden. Board members say Palmieri spent over $1 million to build out the distribution model and the company had begun hemorrhaging cash. Once, Madden says, a check for $19,000 bounced and they could never get the dispensary to pay. Unsold weed sat in the company's warehouse until it went stale and couldn't be sold. And, as the company grew desperate for cash flow, Madden says, Tradiv vetted clients less aggressively; non-payments increased, and Tradiv's losses accelerated.
"If you're a marketplace like Tradiv, the first question is how do you get product around and how do you do it legally," says Micah Tapman, founder of CanopyBoulder. (Transporting marijuana, even in states that have legalized cannabis, technically remains a federal crime.) "We didn't have a good answer."
"I was worried about him"
By the summer of 2016, Sullivan was growing increasingly impatient to hear more about God's plan for him. Then, while bar-hopping with friends on the Fourth of July, he happened upon a group praying on a church lawn. God spoke to him through a woman in the group, says Sullivan. She told him to shed his doubts and follow God. "I became a Christian right there," says Sullivan. "I accepted Jesus as my savior."
Later that week, Sullivan was scheduled to meet with a big potential investor and speak at a cannabis conference in Seattle. He ditched both commitments and traveled to Israel, to hitchhike around the West Bank and, as he puts it, become closer to God. After returning from his pilgrimage, Sullivan was exuberant and regaled employees about his experiences in Israel and how God had started talking to him again. Multiple employees came to Doran, voicing their concerns.
"I was worried about Aeron's mental health," says Doran. "We had employees with kids to think about."
That September, Emily Paxhia and her brother Morgan--who co-founded Poseidon with her--met with Sullivan. He looked gaunt, she recalls. "We were there for three hours. He was talking about his experiences with God," she says. "I was worried about him, because he said he was fasting for his spirituality." Concerned his focus had shifted and worried about the future of the company, Paxhia asked him if he planned to resign from the company, and Sullivan said he did.
Later that month, board members, now aware of Sullivan's religious awakening and the company's mounting burn rate, held an emergency meeting. According to multiple board members, Palmieri was told that his California expansion had failed, that investors were displeased the company had essentially ignored its more than 200 customers in Colorado, and the company's losses required layoffs and other changes.
Sullivan resigned in November 2016, and the board voted to terminate Palmieri on December 8. An email sent from Palmieri's wife's email account says he took a medical leave that November 28 for complications due to Lyme disease, and that he has kidney failure and encephalitis--and that Tradiv fired him without severance or health benefits. (Multiple board members say they were unaware of his illnesses, and that he never took an official medical leave.)
With Sullivan and Palmieri gone, CanopyBoulder's Tapman was named interim CEO. The company's original seed investors--Tapman, Paxhia, and her brother Morgan--went to Tradiv's offices and got to work. "It was very hands on," says Paxhia of a time spent slashing budgets and laying off half the staff. "The company was going under unless we made immediate changes."
Tapman temporarily shut down the company and reopened its original Colorado platform two months later. Business was slow at first, but by October 2017, it was hosting $1 million of cannabis transactions each month. But Buffo's lawyer, even after protracted negotiations, refused to settle her suit for less than $1 million, people familiar with the matter say. That overhang made raising more money impossible. The company's valuation had reached $20 million, but eventually key investors quietly marked the value of their Tradiv stakes down to zero. On December 15, Tradiv informed its customers that it will formally shut down on December 31.
Today, Sullivan is the director of audience engagement at the Bible Project, a pastor-founded company that produces Bible-themed illustrated videos and graphic novels. "When the creator of the universe says he needs you, you have to go," he says. "Maybe Tradiv was supposed to fold. It had too many dirty hands in it, and too much bullshit."
For her part, when asked what she will do differently when making future investments, Paxhia sighs and shakes her head.
"Due diligence is important," she says. "But what am I supposed to do while vetting the next company--ask if the founder is communicating directly with God?"