A $600 million lawsuit targeting multistate marijuana operator Acreage Holdings can proceed to trial, a New York state judge ruled after holding hearings on the case.
The suit – filed by David Feder and the investor group EPMMNY – alleges that New York-based Acreage and more than a dozen other defendants engaged in an illegal scheme that deprived EPMMNY of a 25% interest and management role in the then prospective New York Canna medical marijuana business.
The latest development in the four-year-old case was reported by Syracuse.com.
Acreage, which acquired NY Canna, has said in regulatory filings that it “intends to vigorously defend this action, which the company firmly believes is without merit.”
Acreage holds one of only 10 MMJ licenses in the state. Each is vertically integrated.
The license is ever more lucrative given that the state is preparing to launch a multibillion-dollar recreational marijuana industry late this year or early next year.
Judge Andrea Masley in the New York State Supreme Court heard arguments and evidence earlier this year to determine whether the plaintiffs could go forward with their claims.
“We’re very pleased the court saw things our way,” Feder’s attorney Lawrence Lonergan told Syracuse.com.
The amended complaint seeks $200 million – which plaintiffs claim is the value of the license – plus $400 million in punitive damages and control of the license, Syracuse.com reported.
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The case, depending on its resolution, could complicate Canadian-based Canopy Growth’s agreement to acquire Acreage, which is contingent upon federal marijuana legalization in the U.S.
Shares of Acreage trade on the Canadian Securities Exchange and on U.S. over-the-counter markets.