Hippocratic Growth Maryland Processing, LLC v. Pesce

District Court, D. Maryland·Decided October 6, 2022·No. 1:22-cv-00090·Unknown

Opinion

IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MARYLAND

) HIPPOCRATIC GROWTH ) MARYLAND PROCESSING, LLC, ) ) Civil Action No. 22-cv-00090-LKG Plaintiff, ) ) Dated: October 6, 2022 v. ) ) MICHAEL PESCE, ) ) Defendant. ) )

MEMORANDUM OPINION AND ORDER I. INTRODUCTION In this breach of contract action, plaintiff, Hippocratic Growth Maryland Processing, LLC (“Hippocratic”), alleges that defendant, Michael Pesce, breached a Stock Purchase Agreement that would have allowed Hippocratic to manage a Maryland medical cannabis processor. See generally Compl., ECF No. 6. Defendant has moved to dismiss this action, or alternatively, for summary judgment in his favor, pursuant to Fed. R. Civ. P. 12(b)(6) and 56. See generally Def. Mot, ECF No. 28. This motion is fully briefed. See id.; Pl. Resp., ECF No. 31; Def. Reply, ECF No. 32. No hearing is necessary to resolve the motion. See L.R. 105.6 (D. Md. 2021). For the reasons that follow, the Court DENIES Mr. Pesce’s motion. II. FACTUAL AND PROCEDURAL BACKGROUND1 A. Factual Background In this breach of contract action, Hippocratic alleges that Michael Pesce breached a Stock

1 The facts recited in this Memorandum Opinion and Order are taken from the complaint (“Compl.”), defendant’s motion to dismiss, or, in the alternative, for summary judgment (“Def. Mot.”) and memorandum in support thereof (“Def. Mem.”), and plaintiff’s response in opposition thereto (“Pl. Resp.”). Unless stated otherwise, the facts contained herein are undisputed. 1 Purchase Agreement (the “SPA”) pursuant to which Hippocratic acquired 90 percent of the shares of TC Maryland, Inc. (“TC Maryland”) and the ability to manage Pro Green Medical, LLC (“Pro Green”), a pre-approved Maryland medical cannabis processor. See Compl. at ¶¶ 8, 11; see also Compl. Ex. A (the SPA). Specifically, Hippocratic alleges that Mr. Pesce breached the SPA by refusing to communicate with the Maryland Medical Cannabis Commission (the “MMCC”) about an application to transfer the management of Pro Green to Hippocratic. See Compl. at ¶ 28. As relief, Hippocratic seeks certain injunctive relief, specific performance and to recover monetary damages from Mr. Pesce. See id. at ¶ 33. The SPA As background, Hippocratic is a Maryland limited liability company formed for the purpose of managing a medical cannabis processing facility. Id. at ¶ 6. Michael Pesce is the owner of TC Maryland, and he also serves as the LLC Manager of Pro Green. Id. at ¶ 7-8. On February 18, 2021, Hippocratic, Mr. Pesce, and TC Maryland executed the SPA, pursuant to which Hippocratic acquired 90 percent of the shares of TC Maryland. Id. at ¶ 7. At the time of this transaction, TC Maryland held an option to purchase 100 percent of the membership interests in Pro Green, an entity that had been awarded pre-approval to operate as a medical cannabis processor in Maryland.2 Def. Mem. at 2. Central to the parties’ agreement was their plan to transfer the management of Pro Green to Hippocratic. To that end, Hippocratic agreed to pay Mr. Pesce $5,400,000.00, to provide additional funding to build out Pro Green, and to provide a revolving line of credit for Pro Green’s operating expenses. See Compl. at ¶ 11; see also Compl. Ex. A at A.003, A.0013. Relevant to the pending dispositive motion, Article VIII of the SPA addresses termination of this agreement and Section 7.01 of the SPA provides that:

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