A Hoboken lawsuit accusing former Mayor Ravi Bhalla of taking a bribe to kill a medical cannabis license application is about to reach a strange milestone: its most important witness will be deposed from inside a federal prison. Judge D'Elia has approved an oral deposition of former Hoboken Health and Human Services Director Pantaleo “Leo” Pellegrini at the Federal Correctional Institution at Fort Dix, with the session expected to wrap up by October 15, 2026, ahead of a trial date set for December 14, 2026.
The case, filed by Nature's Touch in July 2024, centers on claims of quid pro quo, retaliation, and defamation against the City of Hoboken, according to Hudson County View. Pellegrini, who sat on Hoboken's Cannabis Review Board and claims whistleblower status, is described in court filings as an essential witness to the case. Judge D'Elia's order approving the deposition made no findings about what statements Pellegrini will actually provide once he's testifying from behind bars.
A Whistleblower With a Federal Rap Sheet
Pellegrini's credibility is likely to be a central battleground at trial. He pleaded guilty to embezzlement in 2025 and was sentenced to two years in federal prison after diverting $223,500 in adult soccer fees and submitting $234,432 in personal expenses for reimbursement by the city, according to a U.S. Department of Justice press release. All told, he embezzled nearly half a million dollars while running Hoboken's health department. He resigned from his municipal post in May 2023 after an investigation led by former New Jersey State Comptroller Matthew Boxer found reasonable cause to believe he'd engaged in unlawful conduct, a finding that prompted a referral to the FBI.
Despite that record, Pellegrini has also filed his own lawsuit against the City of Hoboken and, through counsel, made the claims in 2024 that now underpin much of Nature's Touch's case. Per the appellate decision in the litigation, Pellegrini says then-Jersey City Mayor Steven Fulop angrily called Bhalla about the Nature's Touch license during a lunch meeting on January 14, 2022, and that Bhalla allegedly stated he would quash the application. The same decision states that Fulop allegedly promised to provide legal work for Bhalla's private law firm in exchange for killing the application. Bhalla, now a New Jersey Assemblyman representing the 32nd Legislative District, has said the complaint stems from false claims by a convicted felon and is frivolous.
Competing Dispensaries, Competing Properties
The dispute traces back to a competition between two cannabis applicants trying to plant roots in uptown Hoboken. Nature's Touch had secured a December 2021 letter of intent for a 10-year lease at 1014 Washington Street at $102,000 annually, while rival applicant Story Dispensary targeted a building at 51-53 14th Street that was purchased in November 2021 for $2.4 million by an entity co-owned by Jaclyn Fulop, according to court documents cited by Hudson County View. Court filings indicate Nature's Touch received initial approval from Hoboken's three-member Cannabis Review Board — made up of Pellegrini, Assistant Business Administrator Jason Freeman, and Councilman Mike Russo — at a January 7, 2022 meeting, before executive support was withheld.
According to the New Jersey Cannabis Regulatory Commission, the agency issues licenses for medicinal and recreational cannabis business operations in New Jersey. According to the New Jersey Cannabis Regulatory Commission's April 11, 2024, public meeting slides, more than 120 medicinal and recreational dispensaries were open in 20 counties.
Story Dispensary was reportedly opening in a building co-owned by Steven Fulop's wife, and neighborhood pushback against the proposal in 2022 prompted the Hoboken City Council to pass restrictive amendments capping retail dispensaries at six citywide and eliminating consumption lounges, according to Heady NJ. That same site drew a separate lawsuit in May 2022, when the 51-53 14th Street Condominium Association sued Story Dispensary and property owners Jaclyn Fulop and Drew Nussbaum alleging common law fraud and civil conspiracy, as reported by Jersey Digs. The office of Jersey City Mayor Steven Fulop has denied he ever spoke with Bhalla about cannabis licenses, telling Patch that no family member applied for a license and that the 14th Street lease was not contingent on cannabis approvals.
A Narrowed Legal Path to Trial
The Nature's Touch case was allowed to proceed by the New Jersey Superior Court Appellate Division in December 2025, but the court limited the suit strictly to a single cause of action for tortious interference, according to Heady NJ, dismissing claims that municipal officials acted arbitrarily or capriciously. Woven into the allegations is a $50,000 no-bid contract: the Jersey City Redevelopment Agency approved the professional services deal for law firm Schenck, Price, Smith & King LLP on April 19, 2022, under an exemption from local public bidding laws. Bhalla served as of counsel at that firm when the contract was approved, and Diana Jeffrey was the agency's executive director at the time.
Jeffrey's career has since taken a notable turn: she became Hoboken's corporation counsel on August 17, 2026, after the city parted ways with corporation counsel Arlene Quiñones Perez. The overlapping cast of Hudson County officials has fueled scrutiny that predates this lawsuit — in May 2024, four Hoboken City Council members publicly asked the New Jersey Attorney General and the FBI to investigate allegations of quid pro quo arrangements tied to cannabis licensing and municipal contracts, per Hudson County View.
A Councilwoman Raises Conflict-of-Interest Concerns
Daniel Antonelli, a shareholder and partner at Antonelli Kantor Rivera PC, represents all four defendants in the case. Councilwoman Tiffanie Fisher has raised concerns about that single-firm arrangement, saying representation of all four defendants presents a serious conflict of interest and raises significant ethical concerns. Fisher said Hoboken should have independent counsel whose sole duty is to protect the city and its taxpayers, a comment added to the article in an update.
With the trial date set for December 14, 2026, Pellegrini's prison deposition looms as a pivotal moment for both sides. Whether jurors ultimately find him a credible whistleblower or dismiss him as, in Bhalla's words, a convicted felon making frivolous claims will likely shape how far Nature's Touch's narrowed tortious interference claim can go.
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