The case involving Acreage Holdings offers a peek into the overlapping business ownerships in the booming marijuana industry.

A judge on Friday blocked, at least temporarily, marijuana giant Acreage Holdings from buying the Greenleaf medical marijuana dispensary in Portsmouth after another marijuana business tied to a Warwick dispensary accused Acreage of violating a no-compete contract provision.

In a case that offers a peek into the overlapping business ownerships in the booming marijuana industry, Superior Court Judge Richard Licht issued a temporary restraining order barring state regulators from making any final determination on the Greenleaf sale until further notice.

The order came at the request of a company called CanWell whose CEO is Terence Fracassa, one of the founders of the Summit medical marijuana dispensary on Jefferson Boulevard.

CanWell, with subsidiaries in Maine and Rhode Island, manufactures alternative marijuana products such as edibles and oils and sells them to Summit as well as to dispensaries in Maine and Massachusetts, where recreational use of the drug is also permitted.

CanWell also provides “cultivation and management services” to Summit.

In its 51-page filing asking for arbitration, CanWell alleges that Acreage, one of the nation’s largest cannabis businesses with interests in at least 19 states, is trying to edge CanWell out of the regional edibles market and could be in violation of Rhode Island regulations if it purchases Greenleaf.

The reason: Acreage could potentially end up having financial interests in two of Rhode Island’s three medical marijuana dispensaries and state law bars investors from having a financial interest in more than one.

Here’s how the conflict might emerge: Acreage recently acquired the Maine dispensaries that purchased products and consulting services from CanWell. Those dispensaries owned a small share of CanWell as part of their business relationship. Therefore Acreage now owns a portion of CanWell, which helps manage Summit.

Therefore if Acreage buys Greenleaf, it would have financial interests in two dispensaries.

According to CanWell’s complaint, when it entered into a contract with the Wellness and Pain Management Connection, in Maine, in 2015, the contract included “an ironclad non-compete clause” that prohibited the parties “and their respective successors” from pursuing similar operations in Maine or any other New England states.

But now that Acreage owns most of Wellness and Pain Management Connection, it is trying to oust CanWell as its edibles supplier, despite a longstanding agreement.

“Having been made aware that CanWell would not simply go away into the night, Acreage and its CEO, Kevin Murphy, responded by commencing a bad faith, scorched earth campaign against CanWell in furtherance of its goal to dominate the New England cannabis market,” the complaint says.

Since 2015, the sale of edibles and other alternative forms of marijuana has skyrocketed. In Maine alone, edibles have gone from about 5% of the market to about 40%.

CanWell sees Acreage as a serious threat to its future.

In 2018, with several New England states considering pot legalization, CanWell raised “over $32 million in order to ... establish itself as [a] business leader in the cannabis industry in New England.”

When CanWell balked at renegotiating its Maine contract, Acreage in July issued a termination notice alleging a “long history of non-compliance” with its services, the complaint says.

CanWell says the allegations are “completely meritless” and has asked for arbitration to settle the dispute. A court hearing is set for Sept. 3.

Preston Halperin, a lawyer for Acreage, did not return a telephone call placed at his Pawtucket office.

An email to a media representative of Acreage Holdings was returned as undeliverable and the telephone number listed on company’s website appears to be incorrect.

The byzantine business arrangements among the various entities has raised concern within the state Department of Business Regulation, which has final say over any sale of a dispensary.

State regulations include that dispensary board members or office holders be Rhode Island residents, and that all investors are identified: “Anyone who has any type of financial interest must be disclosed to us,” said Norman Birenbaum, the state’s top regulator, in May when the proposed sale of Greenleaf became known.

An investor can be from another state, but they can’t have interest in more than one Rhode Island dispensary, said Birenbaum, “so we have to make sure there is no conflict of interest.”

Next door, in Massachusetts, the state’s Cannabis Commission is investigating whether big marijuana companies, through complicated ownership structures, have control over more than the three allowed retail stores. Acreage was one of two companies identified by the Boston Business Journal earlier this year as having ties to entities with more than the state’s allowed three licenses.