In a legal battle between two of America's biggest cannabis companies, Cresco Labs Inc CRLBF has accused competitor Green Thumb Industries Inc GTBIF of illicitly recruiting its high-level personnel.
As reported by Chicago Sun-Times, both firms, based in Chicago's River North (IL), have been at loggerheads since Illinois started issuing licenses for medical marijuana in 2014.
What Happened: Cresco filed a lawsuit on Wednesday in Cook County court, alleging that a top-level employee was poached by GTI, in violation of a non-compete clause. Cresco contends that this employee, a former chemist and director of technical services named Christopher Tonge, was induced by another ex-Cresco employee, Matt Ingram, currently GTI's senior vice president of operations.
Tonge's role was central to Cresco, as he developed a unique process for extracting cannabis oil from marijuana plants, which the company claims both increased revenue and facilitated significant cost savings. This distinctive procedure, which led to two patent applications co-invented by Tonge, is seen as a substantial asset for Cresco. However, his employment agreement barred him from working for a substantially similar company within a year.
See Also: Green Thumb Industries Reports Q1 2023 Financials: Revenue Up 2% YoY To $249M, Adjusted EBITDA?
About The Lawsuit: Responding to the lawsuit, a GTI spokesperson refuted the claims and criticized Cresco for misusing its resources. The spokesperson said the litigation is “aimed at preventing a former non-executive Cresco employee from finding a suitable career in the cannabis industry.”
“Instead of investing to retain current employees or support former employees through their transition following a recent sizable layoff, Cresco is spending money on lawyers to monitor and sue its former employees for finding new jobs.”
The lawsuit also notes that Ingram has been reaching out to other Cresco workers, urging them to resign and join GTI, despite being aware of their non-compete obligations. Cresco CEO, Charlie Bachtell, had warned his counterpart at GTI, Ben Kovler, about Ingram's hiring attempts.
See Also: Cresco Labs Q1 Revenue Declines 9.4% YoY, What About Adjusted EBITDA?
Cresco, through its subsidiary JDRC Managed Services LLC, has filed the lawsuit against Tonge, Ingram and GTI-Clinic Illinois Holdings LLC. The company is seeking an injunction enforcing Tonge's non-compete clause, along with damages and other relief.
If you are interested in witnessing the industry's dynamism and progress, understanding legal landscapes, and securing your investment future consider joining us at the Benzinga Cannabis Capital Conference, the place where deals get done, which is returning to Chicago this Sept 27-28 for its 17th edition. Get your tickets today before prices increase and secure a spot at the epicenter of cannabis investment and branding.
Read Next: Khalifa Kush Products Coming To Massachusetts Cannabis Consumers Via Cresco Labs
Photo: Courtesy Of Sasun Bughdaryan On Unsplash
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.
The Benzinga Cannabis Capital Conference is coming to Florida
The Benzinga Cannabis Capital Conference is returning to Florida, in a new venue in Hollywood, on April 16 and 17, 2024. The two-day event at The Diplomat Beach Resort will be a chance for entrepreneurs, both large and small, to network, learn and grow. Renowned for its trendsetting abilities and influence on the future of cannabis, mark your calendars – this conference is the go-to event of the year for the cannabis world.
Get your tickets now on bzcannabis.com – Prices will increase very soon!