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As MSO Cresco Labs pushes to close its $2B acquisition of rival Columbia Care, it has been embroiled in an arbitration related to another deal. The claims stem from Cresco’s acquisition of California operator Origin House, which closed in January 2020. 

The Origin House deal was initially touted as a fast track into California for Chicago-based Cresco. Origin House had six licensed facilities in the state and announced partnerships with several brands.

In the arbitration, vapemaker Kurvana, one of Origin House’s partner brands, claims “Origin House fraudulently induced [Kurvana parent] EH Tech to enter…an exclusive distribution relationship…in order to artificially inflate Origin House’s value prior to its acquisition by Cresco.” Origin House, it alleges, had “no intention” of honoring their memorandum of understanding.

In a responsive filing, Origin denies the allegations and claims Kurvana owes it money. Cresco, which owns Origin House, is not a named party to the arbitration and declined to comment. 

The arbitration, which Kurvana initially sought in November 2020, was heard last week in Orange County. It’s not clear whether the hearing is over or when a ruling has been or will be delivered. 

The case has played out as Cresco and Columbia Care push to close their deal, before the June 30 deadline they announced this year. 

Read the story.