Hawthorne Collective Inc, a subsidiary of Scotts Miracle-Gro Co, is suing investment company JW Asset Management LLC and cannabis company TerrAscend Corp, claiming the duo is violating U.S. antitrust laws and trying to “ruin” Hawthorne’s $175 million interest in a cannabis industry acquisition firm, Reuters reports.
In the lawsuit filed in Manhattan federal court, Hawthorne accuses JW and TerrAscend of attempting to dominate the board of directors of RIV Capital Inc. JW controls TerrAscend. Last year, RIV Capital, with help from a multimillion-dollar investment from Hawthorne, acquired New York licensed cannabis cultivation and retail company Etain LLC for $247 million. TerrAcsend also sought to buy the New York company.
According to the lawsuit, JW, the largest shareholder in RIV, has since tried to oust three RIV directors nominated by Hawthorne and replace them with its own “chosen” members, which Hawthorne claims violates antitrust laws.
In the lawsuit outlined by Reuters, Hawthorne said that the “series of anticompetitive or otherwise wrongful and improper actions” were undertaken “to stop RIV Capital’s entry into the New York-New Jersey market.” The lawsuit claims that stopping RIV’s move into New York would reduce industry competition, to the benefit of TerrAscend.
The case is The Hawthorne Gardening Company v. JW Asset Management LLC. It is filed in the U.S. District Court, Southern District of New York.
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