Glass House Withdraws Defamation Lawsuit Filed Over Product Diversion Allegations

Glass House Brands Inc. has announced the withdrawal of its defamation lawsuit against Catalyst Cannabis Co., citing concerns over Catalyst’s financial stability and potential harassment of Glass House’s customers. The lawsuit, filed against Catalyst and its principals Elliot Lewis and Damian Martin, accused them of making unfounded claims that Glass House was selling cannabis into the unlicensed market.

Catalyst’s allegations, disseminated through social media, asserted that a significant portion of Glass House’s products were diverted to illicit markets, a claim Glass House denied. Rather than specific evidence of wrongdoing, the allegations made by Lewis were based on mathematical calculations highlighting sales & production metrics.

The decision to dismiss the lawsuit against Catalyst was reportedly influenced by several factors, once of which stemmed from doubts about Catalyst’s ability to pay a potential judgment, with Glass House’s statement noting Catalyst’s recent financial struggles, including layoffs and store closures.

In a response posted to LinkedIn, Lewis pointed out that although his company faces obstacles and often does not have much cash on hand due to the nature of the industry and California’s cannabis market, to suggest that his business wouldn’t be able to afford a judgment would be to ignore the “enterprise value”

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