NORTHEAST PATIENTS GROUP, INC. d/b/a Wellness Connection of Maine Plaintiff
CANWELL, LLC and CANWELL PROCESSING (MAINE), LLC Defendants
ORDER ON PLAINTIFF'S MOTION FOR A PRELIMINARY
case came before the court October 4, 2019 for oral argument
on the Motion for A Preliminary Injunction filed September
13, 2019 by Plaintiff Northeast Patients Group, Inc, d/b/a
Wellness Connection of Maine [WCM]. The Motion is opposed by
Defendants Canwell, LLC and Canwell Processing (Maine), LLC
[sometimes referred to collectively as Canwell], The argument
was electronically recorded, Based on the entire record, the
court denies the Motion for the reasons stated below.
array of corporate entities involved in this case is
complicated if not bewildering, so it bears some initial
elucidation. Plaintiff, which does business as Wellness
Connection of Maine [WCM] operates four medical marijuana
dispensaries in Maine. Canwell, LLC is a multi-state cannabis
business focusing on the alternative dosage or consumable
side of the cannabis business model, as opposed to the flower
or production side.
WCM and Canwell, LLC are shareholders, along with others, in
an entity called WPMC, which, like Canwell, LLC, is a
multi-state actor in the cannabis industry. WPMC is 97.4 %
owned by an entity called Acreage.
Canwell Processing (Maine), LLC [Canwell Maine] is the
Canwell entity that focuses on Canwell operations in Maine.
Canwell, LLC is the sole member of Canwell Maine.
2015, Plaintiff WCM entered into a contract with Defendant
Canwell, LLC, the WPMC operating entity, and another entity
called Wellness Connection Consulting, LLC [WCC], The
contract, titled Alternative Dosage Services Agreement,
called for Canwell, LLC "or its designee" to
provide various services and products in connection with
WCM's Maine dispensaries. (The Alternative Dosage
Services Agreement is sometimes also referred to in the
parties' filings and this Order as the Dosage Services
Maine was not a party to the Dosage Services Agreement, but
Canwell LLC assigned its interest in the Agreement to Canwell
Maine in 2018.
2019, WCM terminated the Dosage Services Agreement with
Canwell, based on what WCM claims was Canwell's failure
to perform as required.
"Governing Law and Venue" provision at section 13.7
of the Dosage Services Agreement provides for the
"Agreement and the performance of all obligations
thereunder" to be governed by Maine law and provides
that the parties submit "to the exclusive jurisdiction
of the courts of Maine, with respect to any dispute between
the parties pertaining to this Agreement."
of challenging WCM's termination pursuant to that
provision, Canwell invoked the arbitration provision of a
different agreement to which WCM and Canwell, LLC (but not
Canwell Maine) are parties-the "Amended and Restated
Limited Liability Company Agreement of the Wellness &
Pain Management Connection, LLC" dated October 26, 2015
[the Amended WPMC Operating Agreement].
Amended WPMC Operating Agreement at section 16.3 provides
that it is governed by Delaware law and also provides that
the parties submit to the jurisdiction of the Rhode Island
courts for purposes of "any litigation arising directly
or indirectly from this Agreement, including enforcement of
any arbitrator's award under section 17." Section 17
calls for disputes to be submitted to binding arbitration:
The parties hereby agree that unless otherwise specifically
required by law, any and all disputes, and legal and
equitable claims between or among the Shareholders, the
Directors, the officers, the Company, or any of them, or any
combination of them, which relate to the rights and
obligations of such Persons under the terms of this
Agreement, any agreement contemplated hereby, or any future
agreement, understanding or instrument to which two or more
such Persons may be parties, shall be submitted to binding
arbitration in Providence, Rhode Island in accordance with
the commercial rules of the American Arbitration Association.
Any Person who commences such arbitration hereunder or any
litigation in violation of the terms hereof, and fails to
prevail, shall be liable for all reasonable costs and
expenses of the arbitration or litigation, including without
limitation the fees of the arbitrator(s) and legal counsel to
all parties, and witness fees of all parties to the
central question at hand is whether the Amended WPMC
Operating Agreement's arbitration provision modified or
superseded the provision of the Dosage Services Agreement