New Chapter In Merger Court Battle Among These Two Cannabis Companies

Goodness Growth Holdings, Inc. GDNSF cannabis company has taken legal action against Verano Holdings, Inc VRNOF in a case that concerns Verano’s termination of a share exchange agreement, which had proposed the acquisition of Goodness Growth’s capital stock in mid-2022. The judicial dispute remains unresolved.

Application for Summary Determination

A summary determination is a legal process to expedite a judiciary resolution. In this case, the court makes a decision based on the facts that have been provided, without ordering a trial. Goodness Growth made public its decision to file an application with the Supreme Court for summary determination in its litigation with Verano.

Termination of the Agreement

The merger between Chicago-based Verano and Goodness Growth went sideways on October 14, 2022, when Verano terminated the agreement. The merger was valued at $413M at that time. This led to a civil claim from Goodness Growth, which is seeking substantial damages of more than twice that amount. The sum claimed is estimated at $860.9 million based on Verano's alleged breach of contract and lack of good faith.

At that time, Verano Holdings Corp. terminated its acquisition deal with Goodness Growth Holdings, Inc., which was initially agreed upon on January 31, 2022. The decision was made due to breaches of covenants and representations by Goodness Growth and was deemed “in the best interest of Verano and our shareholders," by Verano CEO George Archos. Verano sought a termination fee of $14,875,000, along with transaction expense reimbursement of up to $3M.

Goodness Growth Counter Claims

The CEO of Goodness Growth, Josh Rosen, has commented on the case: "I stepped into my role at a vulnerable time for Goodness Growth, in the aftermath of Verano's termination of our merger agreement. (…) We view this litigation as a valuable asset of Goodness Growth. Our filing today reflects our ongoing commitment to protecting and realizing it.”

Rosen emphasized the transaction's potential to unlock the company’s potential, especially in New York and Minnesota, and stated: "We are committed to pursuing Verano for what we believe was a calculated and wrongful termination that deprived Goodness Growth of both access to capital and operational improvements." Rosen highlighted the extensive work done to compile evidence and damages analysis, expressing hope for an early determination.