A dispute over cannabis supply contracts has spilled over to an Ontario courtroom, with a group of cannabis producers including Canopy Growth Corp. being sued for $500 million in damages by a group of shareholders behind a Leamington, Ont.-based greenhouse facility.
The lawsuit alleges that Canopy Growth, the firm's venture arm Canopy Rivers Inc., as well as TerrAscend Corp. and its Canadian subsidiary, have committed “bad faith, fraud, civil conspiracy, breach of the duty of honesty and good faith in contractual obligations, and breach of fiduciary duty,” according to court documents.
The lawsuit was filed on behalf of 2615975 Ontario Inc., a company which owns a 51-per-cent stake in Leamington, Ont.’s PharmHouse Inc. The numbered company is led by Paul Mastronardi, chief executive officer of Mastronardi Produce Ltd., a greenhouse operator with over 70 years of experience in growing produce for the Canadian market.
The allegations focus mainly on several supply agreements made in May and October of 2018 between PharmHouse and the three companies named in the suit to provide them with cannabis produced at the Leamington facility under fixed prices.
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