Vireo Health drops THC edibles lawsuit against state of Minnesota

Vireo Health has dropped its lawsuit against the state of Minnesota challenging the constitutionality of a new law allowing the sale of hemp-derived edibles.

Vireo filed a motion to the dismiss the case Nov. 28. Hennepin County District Court Judge Karen Janisch issued an order for dismissal on Wednesday.

A Vireo representative declined comment on the case dismissal.

Vireo, one of two companies authorized to sell medical marijuana in Minnesota, said that its business is "heavily regulated" to comply with state law. The company is allowed to sell medical marijuana, including THC-infused edibles, to patients with qualifying medical conditions.

The company sued in September arguing that the new law opened the floodgates for unregulated competitors to sell products that were essentially no different.

"An unlimited number of unlicensed entities are allowed to sell THC-infused edibles that are chemically identical to Vireo's THC-infused edibles, without having to follow the same strict legal and regulatory requirements as Vireo," the company detailed in its complaint.

Vireo is a subsidiary of Minneapolis-based Goodness Growth Holdings Inc.

The company this week also announced a leadership change. Josh Rosen who has been on the company's board of directors since August 2021, is now the firm's interim president.

Rosen "will focus on driving operational efficiencies and adult-use preparedness in the company's various operating markets to better align resources to capitalize on the growing adoption of adult-use regulations," the company said in a statement.

"Adult use" is the cannabis industry term for non-medical, recreational use of marijuana. It remains illegal in Minnesota.

The publicly traded company last month announced third quarter sales of $18.9 million, a 41% increase from a year ago. The company reported an $8.4 million net loss for the quarter.

"Margin performance in our home market of Minnesota has been especially strong following the commencement of flower and edibles sales earlier this year," said Kyle Kingsley, CEO of Goodness Growth, in a statement.

The company's Minnesota operations generated 54% of its third quarter revenue.

In October, Goodness Growth filed a breach of contract suit against Chicago-based Verano Holdings Corp., which pulled out of a deal to acquire the Minnesota company.