The case involving Acreage Holdings offers a peek into the overlapping business ownerships in the booming marijuana industry.
A judge on Friday blocked, at least temporarily, marijuana giant Acreage Holdings from buying the Greenleaf medical marijuana dispensary in Portsmouth after another marijuana business tied to a Warwick dispensary accused Acreage of violating a no-compete contract provision.
In a case that offers a peek into the overlapping business ownerships in the booming marijuana industry, Superior Court Judge Richard Licht issued a temporary restraining order barring state regulators from making any final determination on the Greenleaf sale until further notice.
The order came at the request of a company called CanWell whose CEO is Terence Fracassa, one of the founders of the Summit medical marijuana dispensary on Jefferson Boulevard.
CanWell, with subsidiaries in Maine and Rhode Island, manufactures alternative marijuana products such as edibles and oils and sells them to Summit as well as to dispensaries in Maine and Massachusetts, where recreational use of the drug is also permitted.
CanWell also provides “cultivation and management services” to Summit.
In its 51-page filing asking for arbitration, CanWell alleges that Acreage, one of the nation’s largest cannabis businesses with interests in at least 19 states, is trying to edge CanWell out of the regional edibles market and could be in violation of Rhode Island regulations if it purchases Greenleaf.
The reason: Acreage could potentially end up having financial interests in two of Rhode Island’s three medical marijuana dispensaries and state law bars investors from having a financial interest in more than one.
Here’s how the conflict might emerge: Acreage recently acquired the Maine dispensaries that purchased products and consulting services from CanWell. Those dispensaries owned a small share of CanWell as part of their business relationship. Therefore Acreage now owns a portion of CanWell,