A long-standing relationship between Cann Global and Medcan Australia is in tatters after both companies accused the other of breaching the terms of a three-year-old commercial agreement.

ASX-listed Cann Global claimed it was “not receiving what had been expected” from the agreement, while Medcan said it had not been paid by its partner on “multiple” occasions.

The acrimonious dispute is now in the hands of lawyers.

Sholom Feldman: disappointed

The fall out surrounds a full-service management deal struck in 2019, subsequently called a facilitation agreement, which saw Medcan provide regulatory, distribution and import and export work for Cann Global under its Office of Drug Control licence.

In early-2019, a plan for Cann Global, then called Queensland Bauxite, to acquire Medcan was dropped in favour of a commercial relationship.  

In a statement announcing the termination of the agreement, Cann Global said it is “disputing fees for services” it believes were not delivered.

“The board believes the termination of this agreement to be a positive outcome for Cann Global shareholders as the company was not receiving what the board had expected from Medcan under the facilitation agreement,” the company said.

“Cann Global management engaged with Medcan to discuss these issues in an attempt to enter into an agreement that would be of better value for its shareholders, but these efforts did not achieve the desire outcome. As a result, Cann Global is disputing outstanding fees for services the board believes were not adequately provided in accordance with the facilitation agreement.”

Under the terms of the deal, Medcan was paid in shares and cash each quarter, Cann Global said.

The nature of the services at the centre of the dispute were not disclosed.

Medcan managing director Craig Cochran rejected Cann Global’s version of events, telling Cannabiz that its legal team was lodging a claim in the District Court to recover “outstanding amounts”.

The end of the road: Medcan MD Craig Cochran says a claim against its former business partner will be lodged with the District Court

“Simply put, Medcan terminated the agreement for multiple unremedied breaches relating to payment under the agreements,” he said. “Our lawyers are now lodging a claim relating to these outstanding amounts.

“In response to [Cann Global] disputing fees, I’m sure they will, but obviously we had an agreement that Medcan adhered to and were not remunerated for. Hence Medcan terminating after multiple breaches on numerous occasions.”

Cann Global chief executive Sholom Feldman said the firm had been partnering with Releaf Group over the past 12 months, and collaborating on several projects including Project Twenty21.

“We are in discussion with the Releaf team to increase awareness of the brand through other modalities with direct access to prescribing doctors,” he said. “We have already seen an increase in prescriptions received through those collaborations and it is a more cost-effective business model for Cann Global with a focus on ROIs.”      

Steve has reported for a number of consumer and B2B titles over a journalism career spanning more than three decades. He is a regulator contributor to health journal, The Medical Republic, writing on...