Last Tuesday in New York, two cannabis-based companies sued each other in rival federal cases over allegations of misspent advances and bad crops.
Early this year, Go Farm Hemp, a Nevada based cannabis grower, entered into a contract with Canopy Growth, a cannabis processing giant headquartered in Ontario, Canada, agreeing to grow hemp for the processor in Colorado, Kentucky, New York and North Carolina.
On Tuesday, Go Farm Hemp filed a $1.9 million federal suit in New York. It accused Canopy Growth of failing to pay a portion of the funds it had agreed to advance Go Farm Hemp. Canopy Growth countered on the same day, citing the Henderson, Nevada based hemp grower of an interstate fraud, designed to cheat Canopy Growth out of money and hundreds of acres of valuable hemp seed.
In a filed complaint against Go Farm Hemp, Canopy Growth stated that it had contracted and paid for 1,115 acres of hemp, but only about 275 acres were viable seed. Furthermore, the Canadian cannabis giant reported that “Go Farm Hemp treated a $12 million advance like a free bank account” instead of using the money to buy land and the equipment necessary for hemp cultivation.
Canopy Growth complained that the hemp grower did not possess the skill, knowledge, and experience to farm over 1000 acres of hemp, and that Go Farm Hemp fraudulently blamed a poor harvest on “hail, grasshoppers and biblical rain.” On this matter, Go Farm Hemp said that it used reasonable cultivation practices at all times.
The Canadian based cannabis giant also seeks punitive measures, citing fraud from the hemp grower. Go Farm Hemp undertook to reduce the number of males in the hemp fields by using feminized seeds and proper sorting of the males every day. Canopy Growth states that the grower did not follow through with this promise.
In its lawsuit, Go Farm Hemp claimed that Canopy Growth harassed and interfered with the grower’s performance by trespassing and threatening trespass to various farms. Canopy Growth, on the other hand, argued that the hemp grower made remedy efforts difficult as it prevented Canopy Growth from entering the fields with its crew to remove the unwanted males. Furthermore, the grower’s complaint states that in August, Go Farm made a settlement offer, but Canopy Growth refused.
Both cases were filed on Tuesday in the U.S. District Court, Western District of New York. No dates have yet been set for resolving both claims. Analysts are of the view that industry players like Dama Financial and SinglePoint Inc. (OTCQB: SING) would wish that this disagreement is resolved amicably so that none of the entities is adversely affected.
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