The case with Acreage Holdings offers a glimpse into the overlapping business owners in the booming marijuana industry.

A judge on Friday at least temporarily prevented marijuana giant Acreage Holdings from buying Greenleaf medical marijuana pharmacy in Portsmouth after another Warwick pharmacy-tied marijuana company accused Acreage of a non-compete agreement to have violated.

In a case that offers a glimpse of the overlapping business owners in the booming marijuana industry, Supreme Court Justice Richard Licht issued an injunction prohibiting state regulators from making a final decision on the Greenleaf until further notice -Sale to meet.

The contract came at the request of a company called CanWell, whose CEO is Terence Fracassa, one of the founders of the Summit’s medical marijuana dispensary on Jefferson Boulevard.

CanWell, with offices in Maine and Rhode Island, makes alternative marijuana products such as groceries and oils and sells them to Summit and pharmacies in Maine and Massachusetts, where recreational use of the drug is also permitted.

CanWell also provides “Cultivation and Management Services” to Summit.

In its 51-page filing for arbitration, CanWell alleges that Acreage, one of the largest cannabis companies in the country with interests in at least 19 states, is trying to keep CanWell out of the regional food market and possibly violate Rhode Island regulations violates when buying Greenleaf.

The reason: acreage could potentially have financial interests in two of the three medical marijuana dispensaries in Rhode Island, and state law prevents investors from having financial interests in more than one.

Here’s how the conflict could arise: Acreage recently acquired the Maine dispensaries that purchased CanWell’s products and advisory services. These pharmacies owned a small stake in CanWell as part of their business relationship. As a result, Acreage now owns a portion of CanWell that can be used to manage Summit.

If Acreage buys Greenleaf, it would have financial interests in two pharmacies.

According to CanWell’s complaint, when the contract was signed with the Wellness and Pain Management Connection in Maine in 2015, the contract contained an “iron non-competition clause” prohibiting the parties “and their respective successors” from conducting similar operations in Maine or other New England states .

But now that Acreage owns most of the Wellness and Pain Management Connection, it is trying to oust CanWell as its food supplier despite a long-standing agreement.

“After Acreage and its CEO Kevin Murphy were made aware that CanWell would not just walk into the night, they launched a vicious campaign against CanWell in an attempt to achieve the goal of dominating the New England cannabis market.” the complaint says.

Since 2015, sales of food and other alternative forms of marijuana have skyrocketed. In Maine alone, groceries have grown from around 5% of the market to around 40%.

CanWell sees Acreage as a serious threat to its future.

In 2018, when several New England states were considering legalizing pots, CanWell raised “over $ 32 million to establish itself as … [a] Business leader in the New England cannabis industry. “

When CanWell refused to renegotiate its Maine contract, Acreage issued a notice of termination in July alleging a “long history of non-compliance” with its services, the complaint said.

CanWell says the allegations are “completely unfounded” and has requested arbitration to resolve the dispute. A trial is scheduled for September 3rd.

Preston Halperin, an Acreage attorney, did not return a call to his Pawtucket office.

An email to an Acreage Holdings media representative was returned as undeliverable and the phone number provided on the company’s website appears to be incorrect.

The Byzantine business arrangements between the various companies have raised concern within the State Department of Business Regulation, which has the final say over the sale of a pharmacy.

State regulations include that pharmacy committee members or incumbents are Rhode Island residents and that all investors be identified: “We must be notified of anyone with any kind of financial interest,” said Norman Birenbaum, the state’s top regulator , in May, when the proposed sale of Greenleaf became known.

An investor can be from another state, but they cannot be interested in more than one Rhode Island pharmacy, Birenbaum said. “So we have to make sure that there is no conflict of interest.”

Next door in Massachusetts, the state cannabis commission is investigating whether large marijuana companies have complicated ownership structures in control of more than the three approved retail stores. Acreage was one of two companies identified by the Boston Business Journal earlier this year as having ties to companies with more than the state-approved three licenses.