Scotts Miracle-Gro Unit and Terr Ascend Chair Settle Dispute Regarding New York Marijuana Firm!

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Scotts Miracle-Gro unit, TerrAscend chair settle dispute over NY marijuana firm

A legal battle between a Scotts Miracle-Gro subsidiary and an investment fund controlled by the executive chair of cannabis multistate operator TerrAscend has been settled, with the MSO-connected investment fund effectively agreeing to be bought out of a deal involving the acquisition of a New York medical marijuana company.

The settlement was announced Thursday by RIV Capital, a Toronto-based investment firm backed in part by the Hawthorne Collective, a cannabis-focused subsidiary of Scotts.

Scotts has supported legalization efforts in the Northeast and is attempting to enter the retail cannabis market in that region.

RIV Capital announced in March that it had agreed to buy Etain Health for $247 million.

Etain is one of the ten vertically integrated medical marijuana companies permitted by New York state law.

The company has locations in both midtown Manhattan and upstate New York.

RIV borrowed $150 million from Ohio-based Hawthorne to complete the Etain transaction.

While vertically integrated companies in New York are currently barred from entering the adult-use market, the state can potentially become one of the largest marijuana markets in the United States in the long run.

The legal wrangling over Etain stems from the fact that RIV Capital’s largest shareholder is TerrAscend’s executive chair, Jason Wild.

Wild controls JW Asset Management, an investment advisory firm that owns nearly 20% of RIV.

TerrAscend has licenses in six states, including New Jersey, where the company operates three stores “near” New York City, according to an investor deck from August 2022.

TerrAscend and Etain would compete for the cannabis market in the northern New Jersey-New York City metro area.

Wild “tried to stop” RIV’s purchase last year for “TerrAscend’s benefit,” according to a lawsuit filed earlier this month by attorneys for Hawthorne against JW Asset Management.

RIV Capital announced Thursday that it had agreed to pay Wild $19.6 million for the company’s shares “currently owned or controlled by” JW Asset Management “and its affiliates.”

RIV Capital also announced that the pending lawsuit had been resolved.

According to the release, Wild “and JWAM have agreed, among other things, not to take any action that would interfere with” Hawthorne’s investment at RIV.

An MJBizDaily request for comment sent to Hawthorne through the company’s general counsel, Peter Safirstein, was not promptly returned.

The settlement, according to RIV’s president Mark Sim, will allow the company to “focus on continuing to operationalize New York, as well as exploring a range of opportunities inside and outside of New York as we seek to build our platform going forward.”

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