Headset Settles Federal PPP Loan Claims

SEATTLE – Headset Inc. agreed to pay more than $1 million to settle claims that it improperly received a Small Business Administration Paycheck Protection Program loan in February 2021, according to an announcement from First Assistant U.S. Attorney Charles Neil Floyd of the Western District of Washington. The loan was later forgiven in August 2021. Federal officials said the company’s data analysis services for Cannabis operators made it ineligible because Cannabis remains illegal under federal law.

The settlement stems from a qui tam lawsuit filed in May 2024 by Sidesolve LLC under the False Claims Act. The whistleblower provisions of that law allow private parties to bring actions on behalf of the government and share in any recovery. Under the terms, Sidesolve will receive 10% of the total amount paid to the government, plus $20,000 for attorney fees and costs.

Headset paid $100,000 within 30 days of the settlement’s signing in early August 2026. The company will pay the remaining balance over four years, with the final payments due in August 2030. Headset did not admit wrongdoing and stated it resolved the matter to avoid the risks and costs of continued litigation.

Headset provides market data, analytics and supply-chain software to Cannabis retailers, brands and producers. The company was founded in 2015 and is based in Seattle. Similar PPP eligibility questions have arisen for other businesses with Cannabis-related activities, reflecting the ongoing tension between state-legal markets and federal prohibitions.

Overall, the settlement illustrates how ancillary Cannabis service providers continue to face federal scrutiny over pandemic relief programs years after the loans were issued and forgiven. The structured repayment schedule and absence of an admission of liability represent a practical resolution for the company while the government recovers funds. Operators and service firms with historical PPP exposure may continue to monitor how qui tam actions and SBA eligibility standards are applied in this sector.