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The “defamatory crusade” that cannabis mega-grower Glass House Brands says its critics are waging appears likely to continue, with the California company’s initial accuser predicting a “long, protracted fight” that’s ultimately intended to yield secret state regulatory data.
The legal mudslinging began in mid-June, when Elliot Lewis, the CEO of Southern California-based retail dispensary chain Catalyst Cannabis Co., alleged in a lawsuit filed in Los Angeles Superior Court that Glass House is “one of the largest, if not the largest, black marketers of cannabis in the State of California, if not the country.”
That lawsuit repeated earlier claims Lewis made in May in videos posted to Instagram and LinkedIn.
On June 20, Glass House struck back.
In a suit filed in Los Angeles County Superior Court, the company and its executive accused Catalyst, Lewis and Lewis’ co-founder, Damian Martin, of running a “systemic defamatory social media campaign” that “falsely” compares Glass House “to a Mexican drug cartel.”
Catalyst’s original suit did not name Glass House’s founders, CEO Kyle Kazan and President Graham Farrar.
Both Kazan and Farrar are named as plaintiffs in Glass House’s current suit.
Glass House pointed out that “no state or local regulator” has ever flagged the company for an alleged violation or imposed any penalties for noncompliance.
The suit added that “Glass House’s vertical integration and strict adherence to compliance has clearly drawn the misplaced ire of” Catalyst.
“Enough is enough.”
In comments to MJBizDaily on Wednesday, Lewis did not back down and suggested that state “track and trace” data held by the California Department of Cannabis Control would become public in court and would corroborate his original accusations.
“If Glasshouse thinks that a defamation lawsuit will invoke fear in or cause retreat from Catalyst and myself, they are mistaken,” he said via email.
“We do however want to thank them for opening up the discovery door as we continue to seek truth on this matter.”
Glass House’s suit seeks an injunction forcing Catalyst to remove defamatory posts as well as unspecified damages, including punitive damages and legal fees.
Lewis “made the claims without any evidence” and “with actual malice motivated by animus” toward Glass House in part because of frustration over industrywide struggles, including a recent tweak to state tax law that shifts burden to retailers such as Catalyst, Glass House alleged.
Catalyst is a “direct competitor” to Glass House, the company’s countersuit claims, and Lewis and Martin are “doing nothing more than spreading falsehoods about a direct competitor” for their “own financial gain.”
For his part, Lewis has said his lawsuits are at least in part motivated by a desire to acquire state “track and trace” data from the Metrc software system.
That data is held by the state and not publicly available.
In a social media post Monday, Lewis struck a less aggressive tone, saying he was “going to take it a down a notch” and focus on Catalyst’s business operations.
But he still got in another dig at Glass House, with whom he expects a “long, protracted fight.”
“You know what I haven’t read?” Lewis asked.
“Anybody saying that ridiculous amount of Glass House product isn’t ending up on the (illicit) market.”
Chris Roberts can be reached at chris.roberts@mjbizdaily.com.
