Massachusetts regulators reportedly are looking into whether New York-based private equity firm Gotham Green left out information about the cannabis licenses it controlled in the state as it sought permission to acquire others.
New York-based iAnthus, which has been trying to fend off Gotham Green’s attempt to take control of the company, alleged in court documents in Canada in late August that the private equity firm withheld information about its interest in MedMen’s two Massachusetts dispensaries as it filed a change-of-ownership request with state regulators, the Boston Business Journal reported.
The state’s Cannabis Control Commission in June approved the request pertaining to three iAnthus MMJ and two recreational marijuana licenses.
State regulators are investigating the issue, according to the Business Journal.
Massachusetts law prohibits a single entity from controlling more than three marijuana licenses of any type, but this case goes to what constitutes control.
As the Business Journal noted, Massachusetts regulators have levied huge fines for regulatory infractions.
Phoenix-based Tilt Holdings, for example, paid $275,000 to settle a case in which its former parent, Sea Hunter Therapeutics, used subsidiaries to control five MMJ treatment centers – thus exceeding the state license cap of three.
Gotham Green didn’t immediately respond to an MJBizDaily query for comment.
But the company indicated in an April letter to state regulators that its interest in MedMen as a lender then didn’t constitute control of the company’s Massachusetts licenses in Boston and Newton.
It’s also unclear how big of an issue this will be to Massachusetts regulators now that Canada-based Tilray has bought most of MedMen’s debt from Gotham Green.