Pot supply dispute leads to $500M lawsuit against Canopy Growth, Canopy Rivers and TerrAscend

Big lawsuit involving some major players.

Original article appeared here https://www.bnnbloomberg.ca/cannabis-canada-pot-producers-including-canopy-growth-sued-for-500m-over-supply-dispute-1.1494505

Some of Canada’s biggest cannabis companies are facing a $500 million lawsuit stemming from a supply dispute between a group of shareholders backing a Leamington, Ont. greenhouse.

The lawsuit alleges that Canopy Growth, the firm’s venture arm Canopy Rivers, as well as TerrAscend. and its Canadian subsidiary committed a series of actions including “bad faith, fraud and civil conspiracy” after refusing to accept cannabis grown at the PharmHouse facility, claiming the rates it once agreed to pay were no longer “commercially reasonable.” The facility, which the plaintiffs claim cost $114 million to build, was initially licensed in July 2019 and completed in February 2020. Canopy Rivers said the lawsuit is “completely without merit,” a statement echoed by a TerrAscend spokesperson, while a Canopy Growth spokesperson declined to comment. 

Commentary:

Unfortunately this was to be expected. When you’re throwing around the sort of money these companies are the more you lose sight of the details.

A supply chain issue like this should not have happened even on the scale these players are dealing with. More money will be wasted because these people cannot stick to their agreements and deal with the consequences. No way to run a business.

Canopy growth made an agreement and then tried to go back on it. Just not good business practices.