Entrepreneurs in the New Zealand cannabis scene have become involved in an ugly legal dispute that has seen accusations fly from both ends.
Mark Scapens and Murray McBride, the founders of cannabis company Eqalis Group, are considering legal action against prolific cannabis entrepreneur Ross Smith for alleged defamatory statements made in a series of emails.
"Our clients believe that Ross has made the statements to you and others with the sole and willful purpose of bringing our clients' reputations into disrepute and to that end causing as much damage as possible to Eqalis' goodwill, reputation and business," said legal counsel Kirsten Murfitt, acting on behalf of McBride and Scapens.
Murfitt told the Herald that Smith had been given until 5pm on June 7 to retract his statements, but he had failed to do so.
In addition to the civil defamatory action, the Herald also understands that another Tauranga businessperson has also lodged a complaint under the Harmful Digital Communications Act in response to alleged online comments made by Smith. Previous members of Medicann have also been in touch with the Police regarding the issue.
A separate source has since also confirmed to the Herald that the police are looking into the matter.
Asked for comment, Smith told the Herald that the police had not yet been in touch with him.
The police would not comment on whether the matter was being investigated.
Offences under the Harmful Digital Communications Act are punishable by up to two years' imprisonment or a maximum fine of $50,000.
Having been included in much of the email correspondence between the parties, the Herald has seen many of the allegedly offending statements but has chosen not to publish them due to the legal sensitivities of the matter.
The animosity between Smith and Eqalis Group arises from last year's liquidation of Tauranga-based cannabis firm Medicann.
Smith co-founded Medicann with businessman Brendon Ogilvy, who served as CEO before later becoming CEO of Eqalis.
The collapse of the company led to a bitter exchange of words between Ogilvy and Smith about what went wrong.
Investors put around $1.4 million into the company before it went under. The first liquidator's report showed that current-year losses for the business sat at $808,000. This left the business with a surplus of $616,141.
The original liquidator's report shows the company owed $43,171 to secured creditors and $3325 to unsecured creditors.
Given the divide between the parties, the matter was handed over to the High Court to determine the facts of the matter.
The second report released in May confirmed that the liquidators are awaiting the results of the court action before the liquidation can be completed.
While this has been ongoing, Smith has levelled numerous accusations at Ogilvy and Eqalis Group regarding the nature of their business.
"Things are now getting out of hand," Smith told the Herald in an email.
Once again, the Herald is unable to publish the exact accusations due to the legal sensitivities involved.
Smith also told the Herald that he had engaged his barrister to take legal action against Ogilvy for alleged harassment in the near future.
In response, Murfitt said that Ogilvy had not yet been served any harassment proceedings and that she doubted they would come to fruition.