Left Coast Ventures, Inc. v. Bill's Nursery Inc.

Left Coast Ventures, Inc. v. Bill's Nursery Inc.

Opinion

ORDER REMANDING CASE

This matter comes before the Court on Defendants' Motion to Dismiss (Dkt. No. 6). Having read the Motion, the Response (Dkt. No. 10), and the Reply (Dkt. No. 11), and the Parties' briefing (Dkt. Nos. 20, 21) in response to the Court's Order to Show Cause (Dkt. No. 17), the Court DENIES the Motion and REMANDS this case to King County Superior Court.

Background

A. The Contract

This case involves a contract dispute over the rights to a license to distribute medical marijuana in Florida. In 2014, the Florida Legislature enacted the Compassionate Medical Cannabis Act ("CMCA"), which allowed the Florida Department of Health to license five "Dispensing Organizations" to cultivate, [*2]  process, and dispense "low-THC" cannabis for qualified patients. (Dkt. No. 1, Ex. B ("Compl."), ¶ 10.) On July 2, 2015, Defendant Bill's Nursery, Inc., doing business as Almond Tree, and Defendant Stephen Garrison, the owner, entered into a contract with Privateer Holdings to prepare two applications for one of the five available licenses. (Id., Ex. A.) Plaintiff, Left Coast Ventures is the assignee of Privateer's rights and obligations under the contract. (Id., ¶ 2.) The contract gave "Privateer or its designee the right to purchase all of the outstanding capital stock of [Bill's Nursery] (the "Shares") free and clear of all encumbrances . . . ." (Id., ¶ 3(a).) On November 23, 2015, the DOH denied the Applications. (Compl., ¶ 16.)

The following year, the Florida legislature amended the Florida statutes to require the DOH to issue medical marijuana treatment center licenses to certain applicants who were denied a license under the previous regulatory scheme. (Id., ¶ 19.) Only those who applied in 2015 were eligible. (Id.) The new law permitted licensees to produce and distribute medical marijuana beyond the low-THC marijuana permitted under the previous licenses. (Compare Dkt. No. 6, [*3]  Ex. A at 1 with Compl., Ex. B at 76.)

In 2018, Bill's Nursery applied for a license under the new law. (Compl., ¶ 20.) The new application relied on the previous application materials that were created by Privateer, and a brief cover email. (Id.) While the DOH initially denied the new application, Bill's Nursery appealed and eventually entered into a joint settlement agreement with the DOH and was awarded a license. (Id., ¶¶ 21, 24.)

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