Article: Deal to dry millions of pounds of hemp turns rotten, lawsuits filed in the U.S.

Growth Op reports…

Breach of contract alleged in dispute between Kentucky-based hemp companies.

Kentucky-based hemp company GenCanna has filed a lawsuit again hemp processor Vertical Wellness, alleging that the company reneged on a contract to dry up to 12 million pounds of hemp, reports Law360.

GenCanna allegedly asked Vertical Wellness to pause the drying operations in November, as the company had filed bankruptcy and was in the process of selling its assets to MGG Investment Group.

GenCanna alleges that Vertical Wellness initially complied but then resumed drying operations at its Cadiz, KY facility in December without the company’s permission.

GenCanna maintains that the contract gave them an option to halt processing, while Vertical Wellness says the agreement was based on GenCanna’s desire to have the hemp processed by the end of 2020.

In a statement to Law360, J. Smoke Wallin, CEO of Vertical Wellness, said GenCanna and MGG breached the contract and called the lawsuit “completely frivolous.”

“We have refrained from discussing this publicly out of respect in trying to reach a settlement, but, given GenCanna’s actions — filing a frivolous lawsuit in federal court — those constraints are now gone,” he added.

The deal represented a major investment for Vertical Wellness, according to correspondence cited in the lawsuit.

“We have built a business around this contract and have numerous employees and vendors who we pay each week based on it,” Wallin wrote. “We have now been shut down for over two weeks and have made close to 31 layoffs at the Cadiz facility.”

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