Glass House withdraws defamation suit against Catalyst Cannabis

California cannabis producer and retailer Glass House Brands has withdrawn its defamation lawsuit against Catalyst Cannabis Co.

Glass House cited concerns in a news release Monday about Catalyst’s ability to pay a judgment and claims the California dispensary operator has been harassing its vendors.

Glass House told MJBizDaily that proceeding with the lawsuit would require revealing details about its customers – information it was unwilling to provide.

“Catalyst appears to want to put the entire industry on trial,” President Graham Farrar told MJBizDaily.

“We don’t think the industry should be on trial, and we don’t want to have any part of it. The absolute last thing the industry needs is infighting.”

Both Glass House and Catalyst are based in Long Beach, California.

Catalyst-Glass House dispute

The legal mudslinging began in mid-June 2023, when Catalyst CEO Elliot Lewis alleged in a lawsuit filed in Los Angeles Superior Court that Glass House was “one of the largest, if not the largest, black marketers of cannabis in the State of California, if not the country.”

That lawsuit repeated earlier claims Lewis had posted to Instagram and LinkedIn.

Glass House followed up with a defamation lawsuit, also filed last summer in Los Angeles County Superior Court, accusing Catalyst, its CEO Elliot Lewis and co-founder Damian Martin, of running a “systemic defamatory social media campaign” that “falsely” compared Glass House “to a Mexican drug cartel.”

In its Monday news release, Glass House said it produced for Catalyst “voluminous documents including manifests for all of its sales over the relevant time period.”

The company said the documents prove that Glass House only sells to licensed brands, manufacturers and distributors through the state’s required track-and-trace software, METRC.

“We have never sold a single pound that did not go through Metrc,” Farrar told MJBizDaily.

‘They know we’re collectible’

Lewis, one of the more outspoken critics of California’s regulated cannabis industry, dismissed Glass House’s claims that Catalyst is in financial trouble.

“I assure you they know we’re collectible, and everybody knows we’re collectible,” he told MJBizDaily.

“Clearly, they realized that handing over the discovery, in my opinion, would be more detrimental to their existence than continuing to litigate.”

Lewis vowed to stay on the offensive and continue pursuing Catalyst’s initial lawsuit against Glass House, though he admitted Catalyst is working through some discovery issues of its own.

Catalyst operates 26 dispensaries in the state, according to its website.

Tax and regulatory lawsuits ongoing

Catalyst is engaged in several ongoing legal disputes, including a lawsuit filed in December in Orange County contending the California Department of Tax and Fee Administration and the Office of Administrative Law colluded to:

• Enact excise taxes and collect related payments from retailers on non-cannabis products, such as accessories, in violation of the state’s Administrative Procedures Act.
• Abuse their emergency regulatory authority to “cram down” improperly retroactive regulations with little notice to operators.

Glass House, one of the largest vertically-integrated operators in California, trades as GLAS on the Cboe Canada exchange and GLASF on the U.S. over-the-counter markets.