Columbia Care Sued Over Alleged License Interference

Florida MCBD is suing New York-based Columbia Care claiming a pattern of wrongful interference as Columbia worked to secure a Florida cannabis business license.

Full story after the jump.

Florida MCBD, a cannabis company focused on low-THC products, is suing New York-based Columbia Care claiming tortious interference with contract, unjust enrichment, civil conspiracy, aiding and abetting fraud, and aiding and abetting breach of fiduciary duty over Columbia’s cannabis license in Florida, the New York Law Journal reports.

According to lawyers for Florida MCBD, the company has sought a medical cannabis license in Florida since 2015 and entered into a joint venture agreement with Sun Bulb, a Florida-based nursery, to help it meet the state’s medical cannabis dispensary license requirements. While Sun Bulb lacked experience with cannabis, Florida MCBD filed confidential information related to its expertise as part of the license application, according to court documents outlined by the Law Journal. The state Health Department initially denied the application from the joint venture but over the next two years the partners lobbied the state legislature to allow additional licenses, the report says.

In the court filing, Sarmad Khojasteh, a partner at law firm Kasowitz Benson Torres, said during that two-year period, Columbia “feverishly sought to obtain a license” but the company’s first two applications were rejected.

The lawsuit claims that in the summer of 2017 Columbia Care executives allegedly entered into secret negotiations with Sun Bulb, conspired to defraud Florida MCBD and the Department of Health, and that the companies agreed to pay Sun Bulb for Florida MCBD’s ownership claims to the dispensary license.

Sun Bulb described its new relationship with Columbia Care in updates to the Health Department, but Florida MCBD’s lawsuit claims that Sun Bulb presented those updates as supplemental information, not as fundamental changes to the license application, which the plaintiffs’ attorneys claim were “prepared, paid for, and filed by” Florida MCBD. By the end of 2017 the Sun Bulb and Columbia Care partnership received a state cannabis license, the report says.

In the complaint, Khojasteh also accused Columbia Care of “a pattern of racketeering and tortious activity” in other states, including Arizona and Massachusetts.

The case is filed in New York County’s Supreme Court Commercial Division. Arbitration between the companies is ongoing.

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