Kentucky-based hemp giant GenCanna Global Inc. has been hit with another lawsuit, this one from disappointed farmers who say they had worked satisfactorily with the Winchester-based company since 2014, when GenCanna first supplied them hemp seed. The complainant seeks $5 million from GenCanna.
The legal action by Furnwood Farms in Kentucky’s Harrison County comes after a group of construction and other contractors recently filed liens against the property owner at the site of a planned new GenCanna processing factory in Mayfield, Kentucky. The contractors claim in their lawsuit that GenCanna owes them $13 million.
Furnwood partners Kendall Henson and Ben Furnish told local television station Lex18 in Lexington that the trouble started when GenCanna approached them in 2018 about drastically expanding hemp fields this year by arranging contracts with other farmers and setting up drying facilities.
“We as Furnwood would come up with 500 acres of farmers, to grow 500 acres worth of hemp, but we would also take it a step further and dry for GenCanna,” Furnish told the station.
Furnwood Farms and GenCanna had grown 76 acres of hemp in 2018 which netted the farmers $1.8 million. According to Furnwood’s attorney Scott White, the much expanded deal GenCanna proposed represented as much as $15-$20 million, so the farming company started to line up contract farmers.
Questions over seed quality
But the Furnwood partners said the agreement was stalled and that it was late June before GenCanna provided seeds — which Furnwood says were of low quality. Meanwhile, the farmers say, terms discussed at the outset of the deal were changed by GenCanna in subsequent draft agreements.
“In order for us to get plants to go into the ground with, we had to sign the agreement,” Furnish said. “It was too late in the year for us to find another source for that.”
Deal is called off
But Furnwood says GenCanna called off the deal in late August, putting the company at risk of losing millions of dollars this year. The amount of damages claimed by Furnwood against GenCanna are as yet unclear.
In a statement to LEX 18, GenCanna declined to comment about the lawsuit itself, but said “we are confident in our position with farmers across the Commonwealth and will prevail in this lawsuit.”