A New York state judge started hearing a case Tuesday on whether a Syracuse investor group can proceed with a $600 million lawsuit against marijuana multistate operator Acreage Holdings and others over a medical cannabis license.
The lawsuit, originally filed in 2018, alleges that Acreage and others engaged in a scheme to deprive the investor group, EPMMNY, out of a 25% interest and management role in the operation, NYCanna, according to Syracuse.com.
Acreage, which filed a motion to dismiss the case, didn’t immediately respond to an MJBizDaily request for comment.
But the New York-based MSO said in regulatory filings that it “intends to vigorously defend this action, which the company firmly believes is without merit.”
A judge in the state Supreme Court in New York City has scheduled several days of hearings over the next week to determine whether to allow the lawsuit to move forward, Syracuse.com reported.
The lawsuit also has potential implications for Canadian-based Canopy Growth’s agreement to acquire Acreage, conditioned on federal legalization in the U.S.
EPMMNY is seeking to prevent Canopy from acquiring the New York license, according to Syracuse.com.
Acreage has a prime position in New York’s potentially massive marijuana market.
The company has one of only 10 medical marijuana licenses, each of which is vertically integrated.
In addition, New York legalized recreational marijuana last year and is now preparing for the launch of what is projected to be a multibillion-dollar adult-use industry.
EPMMNY claims in the lawsuit that it played a key role in obtaining the MMJ license.
The suit seeks $200 million as well as $400 million in punitive damages and control of the New York license, according to Syracuse.com.