Ontario Court rules “frivolous” statement of claim against cannabis retailer had no hope of succeeding

| David Brown

An Ontario judge has ruled a statement of claim by one cannabis retailer against another, as well as the provincial cannabis regulator, is frivolous and vexatious.

In a ruling posted on January 19, 2024, an Ontario Superior Court judge ruled that a claim filed by Ontario cannabis retailer Highland Cannabis Inc., with one location in Kitchener, ON, against High Tide Inc., which owns the largest chain of cannabis stores in Canada, had no hope of succeeding. 

Highland Cannabis Inc. launched its action against High Tide and the Alcohol and Gaming Commission of Ontario (AGCO) in relation to a data breach at the AGCO in 2022. The leak showed data for the sales figures at retail cannabis stores for the months of July 2021 and December 2021. Law enforcement is still investigating the leak. 

High Tide had asked the court to dismiss the action against the company, arguing it was “frivolous, vexatious, and an abuse of the court’s process.” 

Highland Cannabis told the court that representatives of High Tide approached Highland’s owner with an offer to purchase the store following the data breach. In that meeting, High Tide is alleged to have told the owners of Highland Cannabis that it was aware of the independent retailer’s sales figures. 

Although the two parties initially discussed a sale price, it ultimately did not move forward. 

The court documents say High Tide received the leaked data from two sources, and there have been no allegations that the retail chain forwarded or disseminated the leaked data to any other party. It did review the data, though. 

The owner of Highland Cannabis argued that High Tide accessed the data inappropriately, giving it an unfair advantage against Highland Cannabis. They also allege that another location High Tide was interested in, the Ira Needles location, was also based on their access to the retail sales data. The court disagreed, saying High Tide had identified the location prior to the leak. 

Messages between the two parties, shared by the court, show that High Tide offered to buy the Highlands Cannabis location for $7.2 million.

Editor’s note: This article initially stated that Highlands countered High Tide’s offer of $7.2 million, asking for $10 million. While Highlands stated anticipated growth to $10m/y, this was not a counter offer. They did not make a counter offer. In addition, while Highland commenced this action against High Tide and the Alcohol and Gaming Commission of Ontario (AGCO), the dismissal here is only in relation to the action against High Tide, not the AGCO.

Featured image via Google Maps

Related Articles