Cannalife never went public. The defendants then allegedly recommended moving the money into LEEF Holdings Inc., saying a merger between the two companies was imminent and that LEEF would list in early 2020. That did not happen either. In April 2022, LEEF was acquired by Icanic Brands Company, Inc. and began trading well below what Pacific Reach says it was promised.
Pacific Reach alleges the defendants breached their fiduciary duties by putting their own interests first and concealing material facts, broke a contractual duty of honest performance, deceived the company, and made misrepresentations it relied on. None of those allegations has been proven, and the defendants have resisted the disclosure demands as overbroad.
The decision itself is procedural, but it shapes how the dispute will unfold. Pacific Reach asked the court to force fuller disclosure after the defendants resisted, arguing the requests were too broad. The judge sided with Pacific Reach on nearly every point, granting the document categories it sought and narrowing only the demand for Parnitha’s financial records to those showing how the money moved. The communications, due diligence records, and compensation agreements were all relevant, the court found, to the central question of what the defendants knew when they presented the investment.
That last category may matter most to the industry. During examinations for discovery, Petkovic confirmed the defendants had arrangements with both Cannalife and LEEF to be paid for generating investment. The judge found those arrangements relevant to whether the defendants were in a conflict of interest – the question that shadows anyone paid to place other people’s money.
The court ordered the defendants to serve an amended document list and produce the records within 30 days. It declined to make them swear an affidavit verifying their disclosure, finding the dispute over production had been genuine. Pacific Reach, described as substantially successful, was awarded costs in the cause.
