Arizona weGrow Franchise Accuses Rivals of Forming ‘Cartel’ to Sink Phoenix Store

Image of weGrow hydroponics store

WeGrow Phoenix, which offers hydroponics equipment and consulting services, has filed a lawsuit claiming that a handful of rivals colluded to prevent it from gaining a foothold in the Phoenix market.

The suit names four companies that provide hydroponic lights, equipment and other supplies used by home growers and caregivers to cultivate marijuana: Sunlight Supply, Hydrofarm, BWGS and R & M Supply, according to Courthouse News Service.

WeGrow Phoenix claims that the four rivals capitalized on their positions at the top of the market to block out competition and “exclusively control the wholesale hydroponics supply market in the state of Arizona.” These actions kept prices artificially high and limited options for consumers, the suit alleges.

Local entrepreneur Sunny Singh opened weGrow Phoenix’s 21,000-square-foot “super store” in the spring of 2011. It ranked as the very first franchise operation for Oakland-based weGrow, which had big plans to expand into multiple states with MMJ laws including Michigan, Colorado and Oregon. But most of its planned franchise locations have not opened yet, and a few have even apparently closed. The company’s website now lists just two stores: the one in Phoenix and one in Oakland. WeGrow’s founder is also facing 13 felony counts in a lawsuit filed by the city of Oakland.

Very few ancillary MMJ companies (those that don’t deal directly with marijuana) have been able to expand nationally, which is extremely difficult given the volatility of the sector, differing regulations on a state and local basis and other issues unique to the industry. In weGrow’s case, resistance from entrenched competitors in a fledgling market ranks as another challenge.

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  1. Marc October 30, 2012
  2. William Wigle October 31, 2012
    • chrisw October 31, 2012
  3. growace November 3, 2012
  4. John November 3, 2012
  5. Treed November 21, 2012

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