Last week, a Rhode Island state court agreed to temporarily block cannabis behemoth Acreage Holdings' proposed acquisition of a nonprofit dispensary after CanWell, a New England-based cannabis business, accused it of widespread misconduct. With the potential purchase now on hold, the parties will face off in arbitration.

In its arbitration demand, CanWell charged Acreage, one of the largest operators in the U.S. marijuana market, and its CEO Kevin Murphy with engaging in "wrongful, unlawful and tortious conduct," including breach of a noncompete agreement. Specifically, CanWell claimed that Acreage's plan to purchase cannabis nonprofit Greenleaf Compassionate Care Center and take over a Maine dispensary with whom CanWell had a longstanding contract violated the parties' existing noncompete agreement. These acts were undertaken, CanWell said, as part of a scheme to push it out of the alternative dosage space in New England.

In granting CanWell's request for a temporary restraining order, the court enjoined the Rhode Island Department of Business Regulations from making a final decision on Acreage's proposed acquisition of Greenleaf.

News of the dispute was reported by the Providence Journal, the Portland Press Herald, Marijuana Business Daily, and Law360, among others.

CanWell is represented by Pryor Cashman Partner Jonathan Shepard and Counsel Eric Dowell.

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