CHICAGO — The owners of a Highland Park medicinal cannabis dispensary filed a federal lawsuit last week asking a judge to confirm a deal they signed to sell out to a Arizona-based chain of dispensaries is no longer valid.

Elevele LLC, the operator of the dispensary at 1460 Old Skokie Valley Road since March 2016, is 97 percent owned by Veronica and Andrew Hunt of Lake Forest. William Riley, also of Lake Forest, owns the other 3 percent. The firm has sued Harvest Enterprises, Inc., of Tempe, Arizona, which owns more than a dozen retail cannabis locations in five states and announced the pending acquisition of several others earlier this year, according to the lawsuit. The two companies signed a purchase agreement March 25, before the Illinois General Assembly passed a law legalizing the recreational use of cannabis and permitting existing licensed medical marijuana dispensaries to have a one-year monopoly on the newly created commercial market.

Around the same time, Harvest announced the pending acquisition of Chicago-based Verano Holdings, giving it the rights to acquire additional dispensaries in Effingham, Harvest, Norwood Park and St. Charles, according to the suit. It also alleged Harvest's CEO, Steve White, has ownership of another existing Illinois cannabis dispensary. The contract included a clause allowing for it to be terminated if a series of conditions were not met by 90 days after its effective date, which was June 23.

In its suit, Elevele alleged that Harvest breached the agreement by planning to acquire the rights to more than five licenses — the maximum allowed by a single entity under Illinois law. "Between the signing of the Purchase Agreement and June 23, 2019, Harvest did not take adequate or reasonable steps with the [Illinois Department of Financial and Professional Regulation, which administers cannabis licenses,] to ensure that the consummation of the Purchase Agreement would comply with all applicable legal requirements and occur as promptly as practicable — and specifically address the surplus of licenses and the requirement that capped the number of dispensary registrations Harvest could own in the State of Illinois," it argued.

"Put simply, Harvest has embarked on an aggressive acquisition strategy to purchase license rights from dispensary owners without apparent regard that its strategy creates an obstacle to closing the Purchase Agreement with Elevele."

Elevele dispensary in Highland Park (Street View) The suit also pointed to an Aug. 9 statement from Harvest claiming that it owned seven licenses in Pennsylvania, which caps permits for any one owner at five, just as Illinois does. According to a letter included with the lawsuit from the Pennsylvania Department of Health Director John Collins, Harvest's claim was a "blatant misrepresentation" of its status in the state. The department, he said, expects all seven Harvest-linked entities — "Harvest of Northeast PA, LLC," "Harvest of Southwest PA, LLC," etc. — to operate independently as they claimed they would in their permit applications.

The Lake Forest-based owners claim the uncertainly over the purchase agreement "threatens to cause [them] further economic injury," according to their suit. "By creating a condition of uncertainty regarding the Purchase Agreement, Harvest has threatened the economic interest that Elevele retains under the Recreational Cannabis Act to acquire a secondary site and thus increase its goodwill and enterprise value," it said.