Chicago-based cannabis company Verano Holdings has filed a lawsuit against the Racketeer Influence and Corrupt Organization, or RICO, after it allegedly ordered an employee to transport cannabis chips from Illinois to Arkansas, according to a federal complaint published by the Chicago Sun-Times.

In June 2019, [the officer] went to a Verano, Illinois establishment, reluctantly took pieces of Verano marijuana and scored it in a salad from Whole Foods. He then took marijuana salads on a commercial flight from Chicago to Memphis, Tennessee, where he rented a car and drove the marijuana from Verano to [Nielsen], Arkansas. – Federal court case, via Patch.

The lawsuit, filed Monday in Colorado, is based on the allegations of Nicholas Nielsen, a former Harvest Health employee who was arrested in January 2020 after police found more than 9.5 ounces of cannabis and several boxes of concentrates, two indoor grow tents, 380 vaporizers, edibles and various other paraphernalia in his home. An employee was charged with possession of a controlled substance for the purpose of delivery, manufacture of a controlled substance and possession of paraphernalia.

Arizona-based Harvest Health and Verano are partnering with the Arkansas Dispensary, a public natural health agency. In 2019, Harvest planned to acquire Verano for $850 million, but the deal was canceled in March 2020 after an extensive antitrust review, the lawsuit says.

According to the complaint, plaintiff Nielsen worked for Natural State Wellness in Newport, Arkansas, which is operated by Harvest.

The suspects have a problem: Now they can grow cannabis, but how will they get cannabis to grow it in the new state? the lawsuit reads. It’s the chicken and egg problem every licensed marijuana grower faces: They can grow cannabis, but they can’t afford to buy new plant material that doesn’t violate state or federal laws.

In an interview with the Sun-Times, a Verano spokesperson called the allegations completely false and absurd, and a sensational and imaginary series of events directed against a company like Verano, which has a proven track record of compatible operations.

Harvest spokesman Terry Phan called the complaint a barely veiled extortion. Harvest’s attorneys also took action and filed a motion to compel arbitration.

Knowing that his client is legally obligated to submit any dispute to binding and confidential arbitration, Mr. Nielsen’s attorney threatened a smear campaign by filing a lawsuit using maliciously false information unless we paid him millions of dollars. He even went so far as to threaten the headline that he said would result from the trial. – Fan, via the Chicago Sun Times.

Verano has only been listed on the Canadian Stock Exchange since last month.

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