The Hawthorne Gardening Company and Hawthorne Collective, subsidiaries of the Scotts Miracle-Gro Co SMG, sued JW Asset Management, LLC, TerrAscend Corp TRSSF and Jason Wild for violating U.S. antitrust law in their plan to take control of RIV Capital’s CNPOF board of directors, reported Reuters.
The lawsuit states: “This is a case about defendants’ anticompetitive conduct designed to ruin plaintiffs’ $175 million investment in a budding cannabis business.”
When Hawthorne invested $175 million in RIV Capital, it gained three seats on its board of directors. The investment helped fund Riv Capital’s acquisition of Etain LLC and
Etain IP LLC, a vertically integrated cannabis company licensed in New York.
Jason Wild, president and chief investment officer at JW Asset Management and executive chairman at TerrAscend, alleges in the lawsuit that TerrAscend also expressed interest in buying Etain and that the defendants tried to stop Riv Capital from acquiring it.
In December JW Asset Management as the largest shareholder of RIV Capital requisitioned a special meeting of shareholders of RIV Capital for the purpose of replacing five of the seven directors on the board of the company.
The lawsuit alleges that the defendants hope to install their preferred directors to take control of RIV Capital and that JW Asset Management is attempting to disrupt the Etain deal and Hawthorne’s relationship with RIV Capital for TerrAscend’s benefit.
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