A state Supreme Court judge in New York City will begin hearing arguments on whether plaintiffs David Feder and EPMMNY LLC have authority to sue for damages multi-state operator Acreage Holdings, Inc. (OTC:ACRDF) (CSE:ACRG) and other founders of NY Canna, a medical marijuana company, in a $600 million lawsuit, reported Syracuse.com
The company is accused of illegally excluding a partner from a medical marijuana license.
The lawsuit claims EPMMNY played an instrumental role in obtaining the medical marijuana license under which Acreage currently operates, and that the defendants violated a contract for the ownership, management and control of the business license. The complaint seeks $200 million (the amount plaintiffs claim the license is worth) and $400 million in punitive damages.
Meanwhile, attorneys representing defendants have filed motions to dismiss the case claiming their clients did not breach a contract.
In April 2021, Canadian cannabis company Canopy Growth Corp (NYSE:CGC) (also named as a defendant in the suit) revealed that it was contemplating a deal to acquire Acreage in a $3.4 billion deal, thus making it one of the largest cross-border cannabis mergers in the industry’s history. If the case moves forward, the plaintiffs are also seeking to block Canopy Growth from acquiring the NY Canna Inc. license as part of the potential acquisition of Acreage.
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