Michigan judge rejects investor’s bid to force cannabis sale in contract clash

A Michigan judge rejected a cannabis investor’s attempt to force the sale of 56,000 pounds of stored cannabis product while a dispute with business partners continues, Law360 reported.

Oakland County Circuit Court Judge Michael Warren denied the preliminary injunction sought by Mazin Samona and his company Level Up Ventures LLC against several cannabis businesses and their operators, determining that the investor hadn’t proven he would face irreparable harm without immediate court intervention.

“In the end, the Plaintiffs have not met their burden of demonstrating irreparable harm,” Judge Warren wrote in his 15-page opinion, adding that Samona “readily acknowledge[d] that any loss from expiration of the products is quantifiable with money damages.”

The case centers on Samona’s $7.5 million investment in four Michigan cannabis cultivation facilities. According to court filings, Samona sought accounting information about his investment and subsequently filed for arbitration. In response, defendant Ryan Jundt allegedly halted an ongoing sales process and relocated the cannabis inventory.

Samona wanted the court to order the immediate sale of the cannabis with proceeds placed in escrow until the dispute’s resolution. However, Warren found the request problematic on multiple fronts, including that it would create “a new status quo by adding a variety of operating conditions on the business practices of the Defendants” rather than preserving existing arrangements.

The judge included a philosophical observation about the case in his ruling.

“Unfortunately, common sense does not often dictate business disputes, especially those in the burgeoning area of cannabis production and sales,” according to the motion. “Noticeably absent from the jurisprudence involving preliminary injunctions is the authority to mandate or order common sense. Indeed, that is for a Higher Power.”

Warren also said that much of the dispute may eventually be resolved through arbitration as required by operating agreements among the business entities.

The case involves complex ownership structures where three of the cannabis facilities – Wayne St. Holdings LLC, Judah Holdings LLC and Comandante LLC – are each equally owned by Samona’s Level Up and Jundt. Various management agreements and the involvement of other companies, including Jefe Farms LLC and 420 Medz LLC, also complicate the business ties.

Attorneys for the defendants argued that Samona’s proposed order would improperly interfere with contractual rights and potentially undermine claims in related litigation.

Samona’s emergency motion sought to restrain the defendants from “directly or indirectly transferring, selling, alienating, liquidating, encumbering, pledging, leasing, loaning, assigning, concealing, dissipating, converting, withdrawing, distributing, or otherwise disposing of” the cannabis assets.