Council sued for $6.5 million

The Mohawk Council of Kahnawake (MCK) and the Kahnawake Cannabis Control Board (KCCB) are being sued for more than $6.5 million in damages, it was revealed this week.

The documents, which were filed in Montreal on December 18, were viewed this week by The Eastern Door. The suit lists Thomas Lahache, James Stacey, and John McComber as plaintiffs, as well as a numbered company registered to Lahache.

The documents outline the plaintiffs’ allegations that ongoing reassurances from the KCCB led them to make financial decisions related to their cultivation operations, resulting in loss of revenue over the years.

As well as $6,274,074.07 sought in damages to be paid to Lahache’s numbered company, $95,000 is also sought to be paid to Lahache, Stacey, and McComber each as damages for troubles and inconveniences, with interest.

A press release published by the MCK on Wednesday afternoon outlined the general details of the filings, clarifying that no further comment will be provided while the issue is before the courts.

“As cannabis has been a sensitive issue within the community, the Ratitsénhaienhs felt it important to inform the community of the motion for reasons of transparency,” it reads. “We ask for the community’s patience and understanding as we allow the legal process to take its course.”

Lahache’s business, 9076484 Canada Inc., holds a standard cultivation license and standard processing licence from the KCCB as well as from Health Canada. They were first given a standard cultivation license in December 2021.

With these licenses, businesses are authorized to possess cannabis, as well as to obtain dried cannabis, fresh cannabis, cannabis plants, or cannabis plant seeds through cultivation, propagation, and harvesting.

They are also authorized to sell cannabis to holders of a valid distribution license (no distribution licenses have been granted yet in the community) or export product outside of Kahnawake to a licensed processor or retailers in another jurisdiction.

In November 2024, Lahache spoke to The Eastern Door about his business, which at the time employed 25 individuals, almost all of whom were Indigenous. The company exported cannabis product to the Ontario Cannabis Store, a Crown corporation that manages the online retail and wholesale distribution of recreational cannabis to private retailers and consumers in Ontario.

His facility did not and has not sold cannabis within Kahnawake, as no dispensary licenses have yet been distributed in the community.

The court filings detail how, in mid-2024, the plaintiffs pivoted from cultivation to focusing on being a distribution hub “based on the developments and circumstances” of the past few months, including the KCCB publishing a preliminary eligibility list of potential dispensary license applicants.

The KCCB began consultations with community members living near potential sites, and the plaintiffs moved ahead with restructuring their facility and refocusing on distribution instead of cultivation, in preparation for the expected opening of dispensaries that would need to be supplied with cannabis product in the near future. According to the documents, the MCK informed the plaintiffs in October 2024 that the rollout was “on pause” pending Council changes - the same month that another business, The Kannabis Shop, was refused a KCCB processing license. The Kannabis Shop currently has an active application for judicial review underway against the MCK and the KCCB.

The filing also alleges that in mid-October 2024, the MCK assured the plaintiffs that operational costs would be compensated until rollout resumes, with an updated reassurance letter promising licenses by the end of March issued by the KCCB on March 4, 2025.

However, the plaintiffs allege that between April and May of last year, internal discussions were deferred by MCK, with a 45-day moratorium on retail sales of cannabis imposed on June 11, 2025 – a decision which “surprised” the plaintiffs.

In an email to The Eastern Door, the MCK confirmed that the 45-day moratorium applied only to retail sales of cannabis at dispensaries, which were already illegal, and not to cultivation or processing licensees or activities.

At the end of June last year, the KCCB collapsed, with all members resigning, leaving the board non-operational, in the wake of protests against the cannabis industry in Kahnawake.

Since then, the retail licensing process has remained stalled, with no KCCB to navigate the process of issuing licenses.

The crux of the filing is the plaintiffs’ allegation that the MCK and the KCCB “created a cycle of reliance and expenses … without delivery of the retail licenses that were the very foundation of the process,” which resulted in the loss of their time and money.

They allege that the MCK and KCCB’s promises and reassurances are what led them to make the decision to pivot from cultivation to distribution - a costly decision, given that it remains uncertain whether there will ever actually be dispensaries in Kahnawake for the plaintiffs to distribute to.

They argue that they were led to believe for more than three years that retail licensing and distribution was progressively and positively moving forward. They state that they had no reason to believe the MCK or the KCCB would suddenly change  approached, that they were never informed that a moratorium could happen, and that the MCK and the KCCB reassured them that the rollout of dispensary licenses was on track each time inquiries or concerns were raised.

“If (the plaintiffs) had known that (MCK and the KCCB) won’t be going forward after all these years, (the plaintiffs) won’t have shifted their business and operations,” the documents read.

“The ‘last-minute wall’ created by (MCK)’s moratorium and governance breakdown directly prevented Plaintiffs from executing their business plan and recovering its investments.”

Damages listed include sunk costs, like facility modifications; carrying costs, like rent, insurance, staff, and security; lost profits, including projected revenue from the potential distribution of product to the three licensees that would have been given dispensary licenses; reputational harm; and moral damages.

The documents also reveal that the plaintiffs had to subscribe to several loans to continue their work, in addition to lawyer and account fees, and that Lahache had to sell some personal assets to finance the project.

None of the listed plaintiffs nor their lawyer could be reached in time for The Eastern Door’s publishing deadline.

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