John Schroyer
Florida-based Trulieve (CSE: TRUL) (OTCQX: TCNNF) has filed a civil lawsuit against a former business partner in Ohio of Harvest Health & Recreation, which it acquired two years ago, over nearly $24 million in debts.
The defendant companies in the case, Harvest of Ohio and Harvest Grows, were previously affiliates of multistate operator Harvest Health & Recreation, and after the Trulieve acquisition in 2021, the new parent company continued offering financial assistance to the Ohio businesses, the Dayton Daily News reported.
But no longer. Trulieve filed suit on Friday in Franklin County Common Pleas Court against Harvest of Ohio, which runs three dispensaries and a cultivation facility that does business as Harvest Grows, seeking $23.8 million Trulieve said it loaned the company officers, including $4 million in interest.
The debts carried by Harvest of Ohio were ostensibly to pay for “capital expenses, operating expenses, cash funding, payroll, licensing fees, and rent,” the Dayton Daily News reported, and date back as far as 2020.
Trulieve spokeswoman Nicole Yelland said the company has granted 15 delays to Harvest of Ohio on its repayment schedule, the last of which expires this month.
“We agreed to loan them money and they agreed to pay us back, yet they have not paid a penny,” Trulieve told Dayton Daily News. “Trulieve recognized that Harvest of Ohio and Harvest Grows were not negotiating in good faith and had no intention of repaying the almost $25 million debt and decided not to extend the terms any further.”
In a statement released Wednesday, Harvest of Ohio shot back at Trulieve and said the Florida company backed out on promises it made “in a bid to gain control of the businesses built by women and people of color, kicking them to the curb.”
“This approach to business is not new. (Harvest Health & Recreation) and Trulieve’s management have used these strategies in other states and communities across the country, a fact we will prove in court,” Harvest of Ohio said.
Harvest of Ohio was founded by a Black woman, Ariane Kirkpatrick, and the company said its entire reason for partnering with Harvest Health & Recreation prior to the Trulieve acquisition was it pledged dedication to diversity, equity and inclusion, which helped the company win its retail and cultivation permits.
But ever since Harvest of Ohio teamed up with the larger MSO, it found that Harvest Health & Recreation only used its Ohio affiliate to inflate expenses, and also interfered directly with company operations, the press release alleged. That interference extended to Harvest of Ohio’s attempts to repay its debts owed to Trulieve.
“Last week, within days of a productive meeting to finalize resolution, Trulieve abruptly and without advance notice terminated those negotiations and started collection actions,” Harvest of Ohio said in its release. “This development coincides with Florida-based Trulieve opening its first dispensary in Ohio, a competitor to the Black-owned, woman-owned, Ohio-based Harvest of OH Companies.”
