A legal dispute has erupted between two Manitoba cannabis companies over a business partnership that went sour. TobaGrown, Inc. and TobaRolling, Inc., owned by Jesse Lavoie, have filed a notice of claim in Manitoba court against Kief Cannabis Company, Ltd. and Lucky Ventures, Ltd., owned by Jesse Denton and Tim Doerkson. The claim alleges that the defendants breached their contract and fiduciary duties to the plaintiffs, causing them significant financial and reputational damages.
TobaGrown and Kief had a distribution agreement
According to the claim, TobaGrown and Kief entered into an agreement in 2022, whereby TobaGrown would distribute its own branded cannabis products, as well as other brands, from Kief’s federally licensed facility. The agreement was beneficial for both parties, as TobaGrown gained access to the Manitoba market and Kief received a share of the sales revenue.
The claim states that the agreement was successful and profitable, generating over $1.5 million in sales in 2022. However, in 2023, the claim alleges that Denton, the principal of Kief, terminated the agreement without cause or notice, effectively locking TobaGrown and its partner brands out of the Kief facility and the Manitoba market.
TobaGrown and Lucky created a joint brand
The claim also states that TobaGrown and Lucky entered into an agreement in 2022, whereby they would create a joint cannabis brand called “Lucky Stash” for the Manitoba market. The claim alleges that Lavoie, Denton, and Doerkson were all involved in the development and launch of the brand, which was also distributed from Kief’s facility.
The claim contends that Lucky Stash was a popular and successful brand, generating over $500,000 in sales in 2022. However, in 2023, the claim alleges that Denton and Doerkson excluded Lavoie from the management and decision-making of the brand, and refused to pay him his share of the profits.
TobaGrown claims breach of contract and fiduciary duties
The claim asserts that Kief breached its contract with TobaGrown by terminating the distribution agreement without cause or notice, and by withholding over $100,000 in payments, as well as equipment and cannabis belonging to TobaGrown. The claim also asserts that Denton breached his fiduciary duties to TobaGrown by acting in bad faith, dishonesty, and self-interest, and by causing harm to TobaGrown’s economic interests and reputation.
The claim further asserts that Lucky breached its contract with TobaGrown by excluding Lavoie from the management and decision-making of Lucky Stash, and by withholding his share of the profits. The claim also asserts that Denton and Doerkson breached their fiduciary duties to TobaGrown by acting in bad faith, dishonesty, and self-interest, and by causing harm to TobaGrown’s economic interests and reputation.
The claim seeks damages for breach of contract and fiduciary duties, as well as punitive and exemplary damages, interest, and costs. The claim also seeks an injunction to prevent the defendants from using or selling any of TobaGrown’s equipment, cannabis, or brands.
The defendants have not responded to the claim
The notice of claim was filed in Manitoba court on February 16, 2024. The defendants have 20 days to reply to the notice. None of the allegations have been proven in court. Neither Denton nor Kief responded to requests for comment.
