“These nine multistate operators have a history of using these cartels to harm cannabis competition not only in Ohio but in other states,” the lawsuit states.
Ohio Attorney General Dave Yost has filed a lawsuit alleging nine cannabis companies engaged in anti-competitive practices aimed at keeping prices high.
In a press release, Yost’s office said a tip received predicted the trial in October 2024. The anonymous tipster, described as an “employee of the Ohio cannabis industry,” claimed that large, vertically integrated dispensaries have “allocated shelf space” to a large extent.
A subsequent investigation determined that the nine companies named as defendants in the lawsuit “entered into national reciprocal purchasing agreements to prioritize each other’s products at Ohio dispensaries.
Yost says these alleged practices come at a steep cost to consumers and small businesses alike.
“Our investigation revealed allegations of an industry-wide scheme designed to drive Ohio’s small businesses out of business,” Yost said in a statement. ‘Ohio’s antitrust laws protect competition and consumers, not backroom deals that speed up the system for a select few. “
The attorney general’s office noted that an anonymous tipster reported that representatives of several large, multinational cannabis operators met in late 2022. During the meeting, they agreed to reduce purchases from independent retailers to preserve shelf space for each other amid rising supplies and falling prices. The indictment also alleges that some dispensaries have established explicit internal quotas, which are used to reserve a substantial percentage of all available shelf space for products obtained through mutual agreements.
Companies named as defendants in the lawsuit include:
- Climbing on welfare
- Ayer Welfare
- The Cannabis Company
- Cresco Labs
- curaleaf
- Green Thumb Industries
- Joshi
- trulieve
- The desert
Yost described the nine companies as a “cartel” that actively conspires to control and restrict consumer access to hemp products made by small Ohio businesses.
The lawsuit alleges that “these cartels achieve this goal through quid pro quo supply agreements, the sharing of competitively sensitive nonpublic information, and discriminatory distribution practices.” “The goal of these hemp cartels is straightforward: eliminate Ohio’s independent competitors and keep Ohio’s hemp prices artificially high while prices in other states will drop.”
“These nine multistate operators have a history of using these cartels to harm cannabis competition in other states, not just Ohio,” the lawsuit adds. ‘They have systematically leveraged their operations in other states to undercut competition, and now they are applying the same anticompetitive tactics in Ohio. By now, the activities of the cartels have become unregulated.
The lawsuits have sought remedies, including court orders prohibiting the companies from engaging in similar practices. A forfeiture of at least $500 for each day that the illegal “combinations” occurred. and other damages, along with attorneys’ fees and legal costs.
Sources
Ohio Attorney General Sues 9 Cannabis Retailers, Alleged Price Fixing and Antitrust Agreements
Yost is suing multi-state hemp operators for anti-competitive practices
