Seattle-based cannabis data analytics company Headset has agreed to pay more than $1 million to resolve allegations that it improperly received and obtained forgiveness for a federal Paycheck Protection Program (PPP) loan.
The settlement, announced Monday by the U.S. Attorney’s Office for the Western District of Washington, stems from a May 2024 whistleblower lawsuit filed by Sidesolve LLC under the False Claims Act. Sidesolve is a data analytics company that uses AI algorithms to hunt for potential pandemic loan fraud across public records.
The government alleged that Headset was ineligible for the Small Business Administration (SBA) loan it received in February 2021 — and had forgiven in August 2021 — because its work supporting the marijuana industry conflicts with federal law.
Under the terms of the deal, Headset paid $100,000 within 30 days of signing the agreement in early August and will pay the remaining balance of more than $900,000 over four years through August 2030. The company made no admission of wrongdoing, stating it agreed to the payments to avoid the risks and expense of litigation.
Headset was founded in 2015 by Cy Scott, Brian Wansolich, and Scott Vickers. The trio previously co-founded Leafly, the popular online cannabis strain database and marketplace, which was acquired by Privateer Holdings in 2011. After departing Leafly, they launched Headset to bring business intelligence and real-time sales metrics to the legal pot industry.
The startup functions like a Nielsen for the cannabis sector, aggregating point-of-sale data from dispensaries and retailers to provide market trends, pricing insights, and consumer demographics.
Over the years, the company has raised $29.4 million in total funding from investors including Poseidon Asset Management and Canopy Rivers, expanding its data coverage across legal state and international markets.