Last weekend, Barrie, ON extraction and purification firm MediPharm Labs distributed a press release announcing its wholly-owned subsidiary had filed a statement of claim against a then-unnamed licensed producer. At issue was $9.8M in unpaid bills connected with a private-label supply agreement. On Monday, BNN Bloomberg revealed the LP was the already–struggling Quebec LP Hexo.
New Cannabis Ventures, BNN Bloomberg
- According to legal documents, Hexo has failed to make payments on the outstanding amount since October.
Twitter—Betting Bruiser - On Hexo’s end, the deal involved UP Cannabis, a REC brand from Newstrike Brands, which Hexo purchased for $260M last year.
A Hexo representative said the matter involved a contract Newstrike signed before its acquisition, and Hexo intends to fight the suit.
- Cannabusiness development consultant Michael Elkin reported having heard “it was a take or pay agreement and the LP doesn’t want to take….or pay. Nothing was picked up or shipped.”
Twitter—Michael Elkin - One insider suggested this would not be the last take-or-pay contract to go awry, while another noted the deal structure originated in the energy sector.
Twitter—Aaron W Anderson, Benjamin A Smith
Quick Hits
- Germany, Europe’s largest MED market, more than doubled its MED flower imports in 2019, from roughly 3,000 kilograms in 2018 to 6,714 last year. Several LPs are already exporting MED to Germany, and many more are angling to get EU-GMP certified in order to join in the fun.
MJ Biz Daily
