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Whitney Abrams posts "MediPharm Labs sues HEXO Corp. for $9.8M of Unpaid Invoices" on Canada Cannabis Legal

Jan 28, 2020

Cannabis and Business Law lawyer Whitney Abrams published "MediPharm Labs sues HEXO Corp. for $9.8M of Unpaid Invoices" on Canada Cannabis Legal on Tuesday, January 28. 

MediPharm Labs sues HEXO Corp. for $9.8M of Unpaid Invoices​

Image: Whitney Abrams, Cannabis Law LawyerOn Friday, Barrie-based MediPharm Labs Corp. issued a press release announcing that its wholly-owned subsidiary, MediPharm Labs Inc. filed a Statement of Claim in the Ontario Superior Court of Justice against an unnamed licensed producer for the payment of outstanding accounts due and owing pursuant to a private label cannabis oil sale agreement. The total amount outstanding is $9.8 million. 

The deal was announced in mid-February, 2019.The sales agreement was for MediPharm to supply $35 million of private label purified cannabis oil concentrates to a licensed producer.  The deal was made with Newstrike Brands Inc.’s UP Cannabis, which was acquired by HEXO last year. 

Under the Agreement, UP, now HEXO, was to purchase an initial $7.66 million of cannabis oil concentrate from MediPharm, with an additional minimum purchase of $27 million over a 12 month period commencing March, 2019.  The Agreement gave HEXO an option to purchase an additional $13.5 million over the same 12 month period. 

According to the claim, HEXO has failed to fulfill its contractual obligations for the months of November 2019 – January 2020, requiring it to pay the 50% payable per invoice, each which has been delivered by MediPharm.  

HEXO, yesterday, responded publicly to the claim and indicated that it intends to “vigorously defend itself”. A copy of HEXO’s Defence to the claim has not yet been filed and/or made public.