Legal wrangling blamed for closure of Uncle Sam’s pot shops

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This article was published 16/07/2022 (1522 days ago), so information in it may no longer be current.

A cannabis company has shuttered its three Winnipeg locations amidst a lawsuit it launched against its Albertan business partner.

A notice on Uncle Sam’s Cannabis’s flagship store tells would-be customers the business has ceased operations.

Owner Josh Giesbrecht points to the lawsuit, and his Alberta business partner, as the reasons for closure.

“I originally had thought there might be a way to keep things going,” Giesbrecht said. “It became apparent in the last few weeks and days that that wasn’t going to be possible.”

He owns 60 per cent of Winnipeg’s Uncle Sam’s Cannabis branch. Uncle Sam’s Cannabis Ltd. in Alberta holds the remaining 40 per cent.

Giesbrecht closed his Ness and McLeod locations in June. The last remaining store, on Bannatyne Avenue, shuttered earlier this month.

“The company can’t function at this point,” Giesbrecht said.

Recently, the entrepreneur announced he received licensing from the Liquor, Gaming and Cannabis Authority of Manitoba to deliver cannabis products through The Half Circle, his latest venture.

He’ll continue with the delivery business. It will not sell Uncle Sam’s Cannabis items, Giesbrecht said.

He launched a lawsuit against Uncle Sam’s Cannabis in Alberta, its director Wissam El Annan and Delta 9 Cannabis last month.

He alleges El Annan broke a contract in which the two agreed they’d sell their Uncle Sam’s Cannabis stores together. Delta 9 Cannabis announced last March it had bought “all or substantially all” 17 Uncle Sam’s Cannabis stores in Alberta.

Giesbrecht said he found out about the deal through the media. Now, he’s seeking the staying of Delta 9’s purchase, a reversal of any stores transferred to the company, and compensation of $2.4 million to cover “specific damages for loss of interest” in the consolidated Uncle Sam’s Cannabis sale.

“I’m confident in our case,” he told the Free Press Thursday, after both El Annan and Delta 9 Cannabis had filed notices of motions to strike all or part of his court statement.

Delta 9 declined comment on the matter.

“It’s in front of the courts,” said Ian Chadsey, the company’s vice-president of investor and media relations.

Delta 9 Cannabis’s notice of motion, filed June 23, calls for striking Giesbrecht’s statement of claim entirely or partially — including any allegations against Delta 9.

It says Giesbrecht’s statement lacks specificity relating to alleged breaches and damages attributable to Delta 9.

El Annan and Uncle Sam’s Cannabis Ltd. filed their own notice on July 7.

The notice claims Giesbrecht breached his obligations under the Uncle Sam’s contract and committed wrongful conduct against the Alberta company, resulting in losses.

The notice asks, in part, for a leave so El Annan and the Alberta company can take “derivative action” against Giesbrecht.

El Annan could not be reached by print deadline.

Former employees of Uncle Sam’s stores in Winnipeg have alleged mistreatment, as first reported by CityNews.

“It was a really unfortunate experience… something that I really regretted,” said Sadie-Phoenix Lavoie, who said she’d worked at the Ness and McLeod shops last winter.

She said employees’ safety concerns about closing shop for the night weren’t addressed.

“I would get followed to my car,” Lavoie said.

Giesbrecht said Uncle Sam’s Cannabis stores had cameras and panic buttons to keep staff safe.

“There was a lot of issues around not being paid on time,” Lavoie said. “Behind closed doors, there was a lot of mismanagement.”

Giesbrecht rebutted, saying he has no outstanding claims with the Manitoba Labour Board.

“In January, we got hit by Omicron pretty hard, so we had a bit of a rough patch there,” he said, noting employees weren’t paid on time then but were compensated later.

Employment Standards received one claim against Uncle Sam’s Cannabis last January regarding unpaid wages. The claim was closed due to the claimant’s lack of participation, a provincial spokesperson said.

gabrielle.piche@winnipegfreepress.com