US (NY): $600 million lawsuit claims fraud by MMJ company

A lawsuit claiming $600 million in damages against a medical cannabis company that originated with a group of prominent investors in Syracuse is headed for a court hearing this week.

The Syracuse partners initially founded a company called NYCanna around 2013. It was later acquired by Acreage Holdings. The lawsuit details a number of complicated mergers, takeovers and other transactions in the company’s history.

Attorneys representing defendants have filed motions to dismiss the case, claiming their clients did not breach a contract and that plaintiffs lack standing to sue, in addition to other arguments. “As a threshold matter, plaintiff lacks legal capacity to bring this suit,” a motion to dismiss says. The complaint includes “vague and conclusory causes of action… asserted against the NYCI defendants (that) lack merit under even the most favorable reading of the complaint.”
Originally filed in November of 2018, the lawsuit claims EPMMNY played an instrumental role in obtaining the medical cannabis license under which Acreage currently operates, and that defendants violated a contract for the ownership, management and control of the business license. The 230-page amended complaint filed Oct. 4 seeks $200 million – the amount plaintiffs claim the license is worth – plus $400 million in punitive damages and control of the license.

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