Quarterly report [Sections 13 or 15(d)]

Commitments and Contingencies

v3.25.2
Commitments and Contingencies
6 Months Ended
Jun. 30, 2025
Commitments and Contingencies  
Commitments and Contingencies

17. Commitments and Contingencies

Litigation

The Company has been named as a defendant in several legal actions and is subject to various risks and contingencies arising in the normal course of business. Management is of the opinion that the outcome of these uncertainties will not have a material adverse effect on the Company’s financial position.

On December 16, 2024, S.K, D.C. and D.G. (the “Indirect Named Plaintiffs”) filed a complaint in the United States District Court for the Northern District of California against Jupiter, 3Win Corporation, CB Solutions Inc. and Greenlane Holdings, Inc. (collectively, the Defendants”). Jupiter is a wholly owned subsidiary of the Company. In the complaint, the Indirect Named Plaintiffs allege, on behalf of a class of similarly-situated plaintiffs, that the Defendants violated federal and state antitrust statutes through the sale and distribution of closed cannabis oil vaporizing systems produced by Shenzhen Smoore Technology Company, Limited and Smoore International Holdings Limited. On March 7, 2025, the Indirect Named Plaintiffs filed a First Amended Complaint adding Shenzhen Smoore Technology Company, Limited and Smoore International Holdings Limited as defendants. Defendants filed a Motion to Dismiss the First Amended Complaint on June 27, 2025, and Indirect Named Plaintiffs subsequently sought leave to file a second amended complaint, which the Court granted. Indirect Named Plaintiffs filed their Second Amended Complaint on July 16, 2025, and Defendants moved to dismiss the Second Amended Complaint on July 30, 2025.

On February 11, 2025, Earth’s Healing Inc. (the “Named Plaintiff”) filed a complaint in the United States District Court for the Northern District of California against Shenzhen Smoore Technology Co. Ltd, Jupiter, 3Win Corporation, CB Solutions Inc. and Greenlane Holdings, Inc. (collectively, the “Defendants”). Jupiter is a wholly owned subsidiary of the Company. In the complaint, the Named Plaintiff alleges, on behalf of a class of similarly-situated direct purchaser plaintiffs, that the Defendants violated federal antitrust statutes through the sale and distribution of closed cannabis oil vaporizing systems.

On April 10, 2025, Redbud Roots Inc. (the “Named Plaintiff”) filed a complaint in the United States District Court for the Northern District of California against Shenzhen Smoore Technology Co. Ltd, Jupiter Research, LLC (“Jupiter”), 3Win Corporation, CB Solutions Inc. and Greenlane Holdings, Inc. (collectively, the “Defendants”). Jupiter is a wholly owned subsidiary of the Company. In the complaint, the Named Plaintiff alleges, on behalf of a class of direct purchaser similarly-situated plaintiffs, that the Defendants violated federal antitrust statutes through the sale and distribution of closed cannabis oil vaporizing systems.

On April 17, 2025, Summit Industrial Solutions LLC (the “Named Plaintiff”) filed a complaint in the United States District Court for the Northern District of California against Shenzhen Smoore Technology Co. Ltd, Jupiter Research, LLC (“Jupiter”), 3Win Corporation, CB Solutions Inc. and Greenlane Holdings, Inc. (collectively, the “Defendants”). Jupiter is a wholly owned subsidiary of the Company. In the complaint, the Named Plaintiff alleges, on behalf of a class of similarly-situated direct purchaser plaintiffs, that the Defendants violated federal antitrust statutes through the sale and distribution of closed cannabis oil vaporizing systems.

Earth’s Healing, Redbud Roots, and Summit Industrial (“Direct Named Plaintiffs”) sought to consolidate the direct purchaser cases, which the Court entered on May 19, 2025. The Court related the SK Indirect Named Plaintiff case to the Direct Named Plaintiffs’ cases on May 16, 2025.

On May 30, 2025, the Direct Named Plaintiffs filed a Consolidated Amended Complaint, which asserted claims under federal and state antitrust and unfair competition laws.

On June 27, 2025, Defendants moved to dismiss the Direct Named Plaintiffs’ Consolidated Amended Complaint.

On June 27, 2025, M.M. (“M.M. Named Plaintiff”) filed a complaint in the United States District Court for the District of Nevada against Shenzhen Smoore Technology Company, Ltd., Smoore International Holdings Limited, Jupiter, 3Win Corporation, CB Solutions Inc. and Greenlane Holdings, Inc. (collectively, the “Defendants”). Jupiter is a wholly owned subsidiary of the Company. In the complaint, the M.M. Named Plaintiff alleges, on behalf of a class of similarly-situated indirect purchaser plaintiffs, that the Defendants violated federal and state antitrust statutes through the sale and distribution of closed cannabis oil vaporizing systems produced by Shenzhen Smoore Technology Company, Limited and Smoore International Holdings Limited.

On June 28, 2025, H.H. (“H.H. Named Plaintiff”) filed a complaint in the United States District Court for the District of Arizona against Shenzhen Smoore Technology Company, Ltd., Smoore International Holdings Limited, Jupiter, 3Win Corporation, CB Solutions Inc. and Greenlane Holdings, Inc. (collectively, the Defendants”). Jupiter is a wholly owned subsidiary of the Company. In the complaint, the H.H. Named Plaintiff alleges, on behalf of a class of indirect purchaser similarly-situated plaintiffs, that the Defendants violated federal and state antitrust statutes through the sale and distribution of closed cannabis oil vaporizing systems produced by Shenzhen Smoore Technology Company, Limited and Smoore International Holdings Limited. The Plaintiffs voluntarily dismissed their complaint after the Court ruled Plaintiff could not proceed anonymously.

The foregoing complaints seek unspecified damages and an award of costs and expenses. At this time, the Company is not in a position to assess the likelihood of any potential loss or adverse effect on our financial condition or to estimate the amount or range of possible loss, if any, from these actions.