A very well known Cannabis brand has landed itself in some hot water. Wana Brands, the Colorado based ebible makers are being sued by LP Capital, a vape cartridge manufacturer, for alleged stealing confidential information.
LP Capital claims it suffered more than $5 million in damages from lost revenue and business relationships after an acquisition didn’t go through. The cartridge manufacturer also claims Wana lured some of its employees away as things didn’t pan out.
“LP Capital shared its vape strategies and plans with the good-faith belief that Wana would acquire LP Capital and run the vape product line for Wana,” according to the lawsuit
LP Capital, however, claims that Wana is now using the information given to them in good faith that the merger would occur and are using it as their own. LP Capital says they spent 2 million preparing for the merger when it was brought up in July of 2017. An non disclosure was signed in September of the same year; this, Capital says, is when confidential information and strategies were being shared.
The merger was shared with LP Capital Staff in October but many employees were fired and/or quit as Wana believed they wouldn’t fit with the merger.
In October, the suit states that LP Capital stopped all marketing and branding efforts and new sales relationships of its own products. They were told to stop relations with certain partners because of possible conflict, causing significant loss for the LPC.
In December 2017, Wana informed LP Capital that they no longer had interest in pursuing the acquisition. LP Capital court filings also allege that Wana squeezed the firm out of a partnership with California-based vape product manufacturer PAX Labs.
Wana CEO, Nancy Whiteman, denies that claims, citing it has “no merit”
“As the nascent cannabis industry continues to mature, brand leaders are beginning to experience many of the challenges faced in other more mature industries, including groundless lawsuits that seek to damage successful companies. Unfortunately, Wana Brands has found itself in such a situation. We know there is absolutely no merit on which to base this suit, and in the end, justice will prevail.”
-Wana Statement
Written by: Joycelin A. – Contributing Writer
Source: https://mjbizdaily.com/colorado-marijuana-edibles-company-wana-brands-sued-over-merger-collapse/
