A micro producer of cannabis in British Columbia has filed a notice of claim in provincial court, accusing a processing partner of failing to pay him for the products they sold to the Ontario Cannabis Store (OCS). The micro producer claims he is owed $70,000, but is seeking $35,000, the maximum amount allowed in small claims court.
The Deal Between Pineapple Buds and Embark Health
The micro producer, Laine Keyes, is the owner of Pineapple Buds Inc., a micro cultivator and processor in Oliver, BC. He obtained his micro processing licence in April 2023, which allows him to sell his products to provincial markets. However, before he got his licence, he had secured a deal with Embark Health, a BC cannabis producer and their parent company BevCanna, to process and package his products and sell them to the OCS.
According to Keyes, he provided cannabis to Embark Health and BevCanna, who were responsible for selling it to the OCS and paying him for the product. He says his products sold out in “record time” at the OCS, but he never received any payment from the processing partner. He alleges that they lied to him about not getting paid by the OCS, and that they used the funds designated for him to pay themselves.
The Notice of Claim and the Evidence
Keyes filed the notice of claim in a Penticton Court, naming several people connected to Embark Health and BevCanna, including Martino Ciambrelli, who was listed as the Responsible Person In Charge (RPIC) with the OCS by BevCanna. Keyes says he has recordings of his conversations with Ciambrelli, who allegedly misled him about the payment status and gave him personal guarantees that he would be paid.
Keyes also says he has invoices, emails, and other documents that prove his claim. He says he is seeking $35,000, which is half of what he is owed, because the costs of taking the case to the Supreme Court are too high. He says he is willing to settle the matter out of court, but he has not received any response from the defendants.
The Implications of the Case
The case of Pineapple Buds vs. Embark Health and BevCanna is one of the first legal disputes involving a micro producer and a processing partner in the Canadian cannabis industry. It highlights the challenges and risks that micro producers face when they enter into agreements with third-party processors, who may not honour their obligations or act in good faith.
The case also raises questions about the transparency and accountability of the cannabis supply chain, especially when it involves multiple parties and jurisdictions. How can micro producers ensure that they are paid fairly and promptly for their products? How can consumers trust that the products they buy are sourced ethically and legally? How can regulators monitor and enforce the compliance and quality standards of the cannabis industry?
These are some of the issues that the court may have to consider when it hears the case of Pineapple Buds vs. Embark Health and BevCanna. The outcome of the case could have significant implications for the future of the micro cannabis sector in Canada.
