Thor Equities’ hammer can’t be swung as hard as the landlord thought against a Chicago marijuana tenant in federal court.
A cannabis business, MedMen, is trying to keep Thor’s lawsuit over alleged unpaid rent at a Fulton Market space from moving into a state court, arguing that marijuana’s federally illegal status prevents its landlord from being able to enforce a lease.
Thor this week voluntarily dismissed its suit against the tenant in New York federal court after MedMen raised that defense. The landlord stated it planned to refile its case in a state court within a jurisdiction that the weed business is legal and regulated.
MedMen is trying to make sure that can’t happen. The tenant filed a new lawsuit against Thor Wednesday in the federal Southern District of New York to prevent the private equity firm from seeking a new venue.
The latest lawsuit by MedMen demonstrates the lengths some tenants will go to fight their landlords as the cannabis sector gains greater recognition as an industry while still operating within a patchwork of varying state and federal regulations.
In the suit, as in its motion to dismiss the earlier federal case Thor had filed, attorneys for MedMen argue its lease is illegal and thus unenforceable under federal law, as marijuana remains a Schedule I narcotic. The tenant goes on to demand a judgment declaring the lease void.
The filing doesn’t dispute that the tenant hasn’t paid rent since before August 2021 and surrendered the premises at 942-944 West Fulton Street to Thor Equities in February. Attorneys representing MedMen and Thor didn’t return requests for comment.
Thor sued MedMen earlier this year for almost $1 million in unpaid rent at the property. The cannabis company had leased the space for more than two years. MedMen owed more than $950,000 for failing to pay the base rent of $70,727, operating costs of $2,667 and insurance costs of $556 for 11 months, according to Thor’s initial complaint.
The dispensary inked a 15-year lease for the 23,000-square-foot warehouse-style space in August 2019, months before Illinois legalized marijuana on Jan. 1, 2020. The lease provided for an annual rent of $800,000 that will increase each year to $1.2 million in the fifteenth year.
This isn’t the first time Thor has sued a cannabis company over unpaid rent. The High Times dispensary had to pay Thor $4.9 million as a result of a lawsuit, though the company never opened in San Francisco.
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