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Wednesday, May 18, 2022

Cannabis company receives new accusations over failed deal

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The tangled legal battle between two cannabis companies is decidedly dwindling.

In a revised complaint filed with the state Supreme Court on Monday, Ascend Wellness Holdings filed its charges against MedMen, whose New York operations Ascend planned to take over by this year in a $73 million deal.

Ascend’s new complaint says MedMen was a “disrupted and mismanaged” company that was “in breach of contract” the two parties had signed nearly a year ago — attributing the apparent change in MedMen to “seller’s remorse and hope of striking a better deal with a new buyer.”

The updated complaint also alleges that Ascend has already paid “nearly $8.5 million in cash payments to bail out MedMen” since signing the takeover deal a year ago. In January, Ascend Chief Financial Officer Dan Neville He told the Times Union That the payments were made at a time when MedMen was in dire need of an infusion of cash.

The two multinational cannabis companies have been at loggerheads since December, when Ascend and the New York Cannabis Management Office claimed that the two companies had the necessary regulatory approvals to move forward with their deal. However, MedMen has taken the position that approvals by government regulators cannot be considered final and that officials’ assertions to this effect have been unduly influenced by Ascend’s political bid.

After Ascend sued MedMen in an effort to force the company to proceed with the deal, a counterclaim from MedMen alleged that conversations that Ascend CEO Abner Kurtin and President T. Andrew Brown had with Governor Kathy Hochul and her employees were inappropriate.

MedMen . Summons, which was approved last week, seeks to clarify what happened between state officials and Ascend representatives. Ascend moved to dismiss MedMen’s counterclaim, preempting the subpoenas by presenting evidence countering some of MedMen’s specific allegations regarding the whereabouts of Kurtin and Brown during their alleged meeting times.

Ascend’s proposal, which argued that “MedMen knowingly fabricated a narrative that Ascend exercised undue influence on New York State government officials in order to obtain regulatory approval,” is accompanied by records of MedMen’s 2018 private donations to the campaigns of former Governor Andrew Cuomo and state attorney general Letitia James. .

The market value of MedMen NY, the disputed New York subsidiary, is believed to have risen dramatically in the past year after the state legalized cannabis for recreational use and expand the state’s medical marijuana program.

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