Coast Reporter
The two sets of equipment were expected to produce 20,000 pounds of marijuana each per year at a rate of $200 a pound or $8 million per year.
A Washington State cannabis company is suing a Vancouver business and two people from Richmond for $2 million for not supplying grow operation equipment as per a 2022 agreement.
USA Cannabis LLC alleged a breach of contract in a June 5 B.C. Supreme Court notice of civil claim.
In the claim, the company alleges Mingguo Liu and Jing Zhou both doing business as Botanic Workshop Ltd., and Botanic Workshop Ltd. did not facilitate production of a fully automated cannabis cultivation facility. USA Cannabis alleges breach of contract., saying it suffered losses of more than $2 million.
The claim asserts the funds were put toward Liu’s property on Gilbert Road in Richmond (Zhou’s address was listed in Vancouver). It noted Botanic’s business was dissolved in November 2022.
USA Cannabis alleged a March 13, 2022, agreement between the parties provided for a production facility with two sets of equipment at $4 million each.
The claim said those units would produce 20,000 pounds of marijuana per year at a rate of $200 a pound or $8 million per year.
For the equipment, USA Cannabis agreed to pay $300,000 within a week of the deal and $900,000 before shipping and customs clearance. Six million Chinese renminbi, or RMB, (worth $1.14 million at the current exchange rate) would go to a designated Chinese fund account before the equipment shipped 3.2 million RMB was set to be paid after the first batch of seedlings grew to finished plants. Botanic was also supposed to provide a Chinese value-added tax invoice for the RMB funds.
USA Cannabis said that by the end of June 2022, it had paid the equivalent of roughly $2 million.
“After receiving the funds, Zhou and Liu, as the directing minds and/or principals of Botanic, caused Botanic to voluntarily dissolve on November 30, 2022,” the claim said.
In dissolving the company, Botanic had not fulfilled its contractual obligations, according to the claim. The claim alleges Zhou and Liu never intended to meet its contract obligations.
“Rather, they were participating in a fraudulent scheme to induce USA Cannabis to pay the funds in the false hope the agreement would be performed,” the claim said.
The defendants have yet to file a response to the claim. Neither could be located for comment.
None of the allegations has been proven in court.
