An Arkansas medical cannabis company is suing the Missouri firm that had nearly 63,000 of its products recalled, the St. Louis Post-Dispatch reports. In its lawsuit, Dark Horse Medicinals Missouri, LLC says it purchased $325,632 worth of the now-recalled products from Delta Extractions “not knowing that the distillate was unusable in Missouri.”
In addition to Delta, the lawsuit names SLCC; Midwest Magic Cannabis Co.; Oklahoma-based Conte Enterprise; and 10 defendants identified only as “John Doe.” The lawsuit accuses the defendants of fraud, breach of contract, and of civil conspiracy. It is asking the court for damages, and that the court pierce the corporate veil and hold John Does 1-10 “personally liable for Dark Horse’s damages.”
The lawsuit said Dark Horse entered into a management agreement with SMA Manufacturing, which holds a medical cannabis manufacturing license and through the agreement, Dark Horse would manage and operate Coco Labs. In May, Dark Horse, through Coco, was in the market to purchase distillate for its various medical cannabis products, according to the lawsuit, and that it had acquired the distillate manufactured by Conte which had a manufacturing agreement with Delta. Dark Horse received a certificate of analysis along with its purchase that showed the distillate “net the regulator standards for cannabis products in Missouri,” according to the lawsuit.
The lawsuit claims that Dark Horse would not have purchased the products had the company known it was unusable in Missouri and that the defendants “knowingly and intentionally withheld from Dark Horse the fact that the distillate was unlawfully sourced or derived.”
Delta is currently suing the state over the recall and suspension of its license. Prior to the recall, Jack Maritz, manager for Delta, testified to the Administrative Hearing Commission that it had used THCa from out of state, which, he argued, was allowed under previous state regulations.
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