Cann Group has announced it intends to "vigorously defend" legal proceedings filed by New Zealand-based Rua Bioscience, which has accused the cannabis cultivator of breaching a supply contract.
Rua is seeking damages from Cann Group subsidiary Cannoperations over an alleged violation of contractual rights granting Rua exclusive authority to sell Cann's medicinal cannabis products in Australia.
In the claim filed with the Supreme Court of Victoria, Rua alleged that Cann had been contracted to supply particular medicinal cannabis products exclusively to Rua for resale across Australia and New Zealand throughout the duration of the agreement.
The alleged breaches have caused Rua "significant damages", the company said.
Cann Group described the legal action as stemming from a manufacturing and supply dispute "which has escalated over time" despite the company's attempts to reach an "amicable" resolution.
"Cann denies the claims bought against it and will vigorously defend the action," it said in a statement.
Rua disclosed in early December that Cann had issued 12 months' notice to terminate the supply agreement, a development that led the New Zealand company to "consider its legal options".
"There have been recent quality issues with Cann's export products, which had already prompted Rua Bioscience to proactively explore alternative supply partnerships," Rua said in a statement to the NZ stock exchange late last year.
"In the last 12 months, Rua has placed emphasis on securing multiple additional supply pathways with particular emphasis on cultivating our unique genetics in Europe and Australia."
Rua Bioscience chief executive Paul Naske added: "While we appreciate the history we have had with Cann, we are committed to ensuring the continuity of our operations and maintaining the highest standards in product quality."
