Earlier this week, a subsidiary of DionyMed Brands Inc. (OTC: DYMEF) filed a lawsuit against Eaze Technologies, Inc. in the California Superior Court for the County of San Francisco. The former is pursuing an injunction to stop Eaze’s alleged processing of credit and debit cards through its website and app.
The plaintiffs argue that “to gain an unfair competitive advantage in the California cannabis delivery market, Eaze is directing, coordinating, and participating in a scheme to defraud credit card companies and financial institutions into processing cannabis transactions in violation of a host of criminal laws.”
Benzinga reached out to both companies.
DionyMed CEO Edward Fields told Benzinga in a statement:
The complaint alleges Eaze’s processing of debit and credit cards is fraudulent and illegal, and gives Eaze an unfair competitive advantage over Chill and other compliant operators. We are completely committed to operating in a compliant way and it’s important that there’s a level playing field for all participants in the cannabis ecosystem. We also believe investors have to have a reasonable expectation that all participants are subject to the same rules. Regulators, especially in California, cannot afford to put investor capital at risk by allowing illicit operators to break the law.
Eaze says the claims are false and unsubstantiated. The company’s Senior Director of Corporate Communications Elizabeth Ashford told Benzinga:
Cannabis payments overall are a structural challenge for all cannabis businesses in the U.S. and Eaze will keep fighting for federal banking reform. Instead of trying to undermine the U.S. market, DionyMed should focus on explaining to Canadian Securities Administrators why they processed millions of dollars in credit card transactions and booked that revenue as a publicly traded company.
More to come soon.
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