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Organigram (V.OGI) faces lawsuit, responds with allegations of defamation

Chris Parry Chris Parry, Equity Guru
0 Comments| July 21, 2015

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Investors in MMPR-licensed medical marijuana company Organigram (TSXV:OGI, Forum) were faced with news Tuesday that a group called Marijuana for Trauma (MFT) had filed a lawsuit against the New Brunswick outfit claiming “breach of confidence, conversion, breach of contract, conspiracy and breach of trust, breach of fiduciary duty, and negligent misrepresentation.”

The group alleges it was denied proper interest in a deal with Trauma Healing Centers (THC) to open clinics for PTSD sufferers across Canada.

"We had an agreement with OrganiGram and [CEO] Denis Arsenault to expand our services assisting veterans suffering from PTSD," said Fabian Henry, founder and president of Marijuana for Trauma Inc in a news release. "The agreement was supposed to create a seamless experience for approved clients in need of a referral to a licensed medical marijuana producer. The termination of our business arrangement and subsequent use of our business and expansion plans is unlawful and will affect our ability to help hundreds of veterans."

OGI stock held firm despite the news.

A response, from V.OGI IR honcho Brett Allan, arrived before trading close.

“While we are aware of the lawsuit filed by MFT, the details, as outlined in their national press release are inaccurate and defamatory,” he said. “At no time was there ever an agreement with Organigram Holdings or OrganiGram Inc. with MFT in relation to the development of Trauma Healing Centers (THC) across the country.”

He continued, “We believe this lawsuit to be an attempt to embarrass the principals and the company as well as to deflect from the failure of the principals of MFT to fulfill an employment contract they signed with THC in 2014. We intend to defend these false claims vigorously in court and intend to file a counter claim against MFT.”

Allan went on to claim MFT has not been operating openly and honestly.

“As a result of their news release we have discovered that MFT has been signing exclusive deals with a number of licensed medical marijuana producers (LPs) across the country and not fulfilling those contractual obligations. At the end of the day we look forward to the truth being unveiled."

When reached for comment, CEO Arsenault said THC has opened its clinics and is “feeding OGI quite nicely.”

Q3 results for the company, which currently has a $19.1m market cap, are expected in the weeks ahead.

--Chris Parry
https://www.twitter.com/chrisparry






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