Jushi Accused of Fighting Competition in Massachusetts

MJ’s Market Inc., a small, closely held Massachusetts corporation established in May 2018, is accusing Jushi Inc. (OTC: JUSHF) of fighting its efforts to open a dispensary in Tyngsborough, which would be its second store in the state.

According to Law360, the town decided to approve only two stores, and MJ’s Market wants one of them. One store, Nature’s Remedy, is already open – and was acquired by Jushi.

MJ’s Market says it wanted to offer local consumers an option for lower-priced products, but with Nature’s Remedy being the only dispensary in town, it can control prices. MJ’s Market also argues that the Tyngsborough market is roughly $35 million a year.

The MJ’s Market group said that it was going through the standard municipal approvals required, such as the Select Board, the Planning Board, the Zoning Board of Appeals, and the Conservation Commission. They accuse Jushi of filing sham petitions and objections with regard to the municipal approvals.

For example, the case states that Jushi argued there would be a traffic impact as a result of the dispensary, but didn’t actually provide a traffic impact study. The court filing also states that Nature’s Remedy did not have to provide a traffic impact study, which would suggest that there is no traffic issue for the location.

The court filing also states that after bringing up the traffic concerns, Jushi then applied for a distribution facility in the roughly same location, which would result in 3,500 vehicle trips a day. The town approved the facility in September 2022.

Another feature in the argument is that the town wanted the operations clustered in an area with a heavy police presence. A separate company called Royalty was originally approved for the second store but ultimately didn’t move forward, opening the way for MJ’s Market.

Select Board Pushes Back

The filing noted, “The Select Board made clear that its disappointment was based ‘on the fact that, at all times, Nature’s Remedy and, subsequently, Jushi MA, Inc. were aware that the Town of Tyngsborough … intended to issue, and did issue, Host Community Agreements (HCAs) to two stores in close proximity to one another on Middlesex Road … for purposes of planning, public safety, and an agglomeration factor to help both businesses succeed.'”

The lawsuit also noted that the Select Board’s intention was “publicly known prior to Jushi MA, Inc.’s merger with Nature’s Remedy” and that “all HCA applicants were specifically asked if they knew and understood that a competing business may open in close proximity and they were asked if they would still like to proceed with the process. Nature’s Remedy understood this and chose to proceed.”

The filing alleges that the issue with the two-store approval began when Jushi acquired Nature’s Remedy in April 2021. The case also states that as part of the acquisition agreement, the sellers were told they would get an additional $15 million if no competition was allowed.

At the time of the acquisition, Green Market Report wrote that Jushi agreed to acquire Nature’s Remedy for an upfront payment of $100 million, with $40 million in cash, $55 million in subordinate voting shares of Jushi, and a $5 million unsecured promissory note. Jushi also agreed to issue up to an additional $10 million in shares upon the occurrence or non-occurrence of certain conditions after the closing date, bringing the total potential consideration for the acquisition paid by the company to $110 million.

MJ’s Market said the delays have cost the company $45 million in lost revenue and legal fees. It is asking the court for $60 million in damages.

Jushi has not yet responded to a request for comment.