Bizarre On December 9, 2019, the Company was served with a statement of claim commenced by Emblem Cannabis Corporation (“Emblem”) recently acquired by Aleafia Health Inc. in respect of a supply agreement whereby the Company would provide Emblem with certain cannabis product over a period of five years pursuant to the terms of the supply agreement. Emblem has terminated this supply agreement on the basis of, among other things, alleged failure by the Company to provide the requisite cannabis product pursuant to the terms of the supply agreement. The Company intends to vigorously defend itself against such claim. As at February 29, 2020, the Company has not recorded any uninsured amount related to this contingency.
This is from Note 31, Financial Statement. Why would you not provide the product given their inventory instead of defending in a seemingly futile situation. This was a 5 year commitment! As Emblem is required to mitigate its’ losses, this must be a specialty product that they could not source elsewhere.