Cannabist: the consent that cannot be given

Philip Goldberg founded the Maryland cannabis business known as Green Leaf Medical, and sold it to The Cannabist Company Holdings Inc. in 2021. He swore an affidavit on August 17, 2026, from Potomac, Maryland, by videoconference to a commissioner in Ottawa, to tell an Ontario judge that a piece of what Cannabist now proposes to sell cannot lawfully be sold — at least not in the form the agreement contemplates, per Responding Affidavit of Philip Goldberg, sworn August 17, 2026, paras. 1, 4.

The motion he is responding to is returnable the following day.

What is being sold

The Cannabist Company Holdings Inc., The Cannabist Company Holdings (Canada) Inc. and Columbia Care Delaware LLC have been under CCAA protection in the Ontario Superior Court of Justice (Commercial List) since March 24, 2026, with FTI Consulting Canada Inc. as monitor and a parallel Chapter 15 proceeding in the United States.

On August 18 the applicants seek approval of two sale transactions and a set of ancillary orders carrying releases. The second of those transactions is Maryland, and it comes in two agreements, both dated August 7, 2026.

The Maryland APA sells substantially all of the assets used in cannabis cultivation, production, manufacturing, distribution and retail in the state. The sellers are Columbia Care MD, LLC; Green Leaf Extracts, LLC; Wellness Institute of Maryland, LLC; Green Leaf Management LLC; and Green Leaf Medical, LLC — the business Goldberg built, under the name he built it under. The buyer is Free State Botanicals Holdings LLC, splitting the assets between a cultivation buyer and a dispensary buyer, per Fifth Report of the Monitor, August 13, 2026, para. 33.

The Maryland RPA sells the real estate: a cultivation facility at 6797 Bowman Crossing in Frederick, Maryland, to 6797 Bowman Frederick LLC, an affiliate of Vireo Growth Inc. The consideration is not a price but an assumption — the buyer takes on, or else pays off, an East West Bank loan advanced in an original principal amount of $6,250,000 under documents dated August 9, 2023, per Fifth Report of the Monitor, August 13, 2026, para. 34.

Buried in the schedule of what transfers under the APA is the item this piece is about. The transferred assets include not only each seller's operating assets but "the Member's right, title and interest in the Sugarloaf MSA and Sugarloaf Purchase Option Agreement" — a management and services agreement, and an option to buy, relating to a Maryland dispensary, entered into when Cannabist bought the Maryland business in the first place, per Fifth Report of the Monitor, August 13, 2026, paras. 33, 36.

The monitor flagged the problem in its own report, in the careful register monitors use when a deal has a hole in it: it understands that consent may be required to assign those agreements, and that the counterparty, or their representatives, have indicated they may not provide it, per Fifth Report of the Monitor, August 13, 2026, para. 36.

The counterparty's account

Goldberg is a manager of Sugarloaf Holdings, LLC and chief executive of its wholly owned subsidiary Sugarloaf Enterprises, LLC. He is also a manager of Nova Management Group, LLC — which, as he notes, was the initial proposed buyer of Cannabist's Maryland assets, the one referred to in the applicants' own affidavit material, per Responding Affidavit of Philip Goldberg, August 17, 2026, paras. 1, 5.

So the objector is the man who sold the business, and a principal of the party that first offered to buy it back.

His stated objection is not, on its face, commercial. Both the Sugarloaf MSA and the Sugarloaf Option Agreement contain provisions preventing assignment without the other party's consent. What he says is that his companies are not in a position to give it, and the reason is Maryland regulation.

His account runs in three steps, and each is put as his belief and experience as a long-time operator in that market rather than as legal advice to the court.

First, that Maryland's cannabis laws and regulations, as recently interpreted by the state regulator, prohibit the simultaneous existence of a management services agreement and a purchase option. There had been a period when a purchase option could be entered into as long as the option provision was not contained directly in the management services agreement; since then, he says, the Maryland Cannabis Administration has read the statutory language more broadly, so that separate option agreements treated as related agreements fall within the prohibition, per Responding Affidavit of Philip Goldberg, August 17, 2026, paras. 7–8.

Second, that Maryland passed legislation in 2024 prohibiting "straw ownership" of cannabis licences, after the Sugarloaf agreements were executed — and that the provision reaches not only the entering into of such arrangements but the maintaining of them. He says he is not aware of any basis on which the regulator could treat pre-existing non-compliant agreements as grandfathered, per Responding Affidavit of Philip Goldberg, August 17, 2026, para. 9.

Third, and this is the sharp end: if the agreements are put in front of the Maryland regulator in connection with a proposed assignment, the regulator may deem one or both unenforceable — and the risk runs past the agreements to the licence itself. Allowing the structure to remain in place, or seeking approval of an assignment of it, could lead to revocation of the Sugarloaf Enterprises Maryland dispensary licence. Correcting the compliance problem, on his account, would require terminating one or both existing agreements and entering into alternative ones, per Responding Affidavit of Philip Goldberg, August 17, 2026, paras. 7–8.