On May 11, 2018 a
Exhibit,Appendix
was filed
involving a dispute between
Cresco Labs Llc, An Illinois Limited Liability Company,
Cresco Labs New York, Llc,
A New York Limited Liability Company,
and
Eric Sirota,
Fiorello Pharmaceuticals, Inc.,
A New York Corporation,
John Does 1 - 10,
Susan Yoss,
for Commercial Division
in the District Court of New York County.
Preview
FILED: NEW YORK COUNTY CLERK 01/10/2023 10:09 PM INDEX NO. 652343/2018
NYSCEF DOC. NO. 733 RECEIVED NYSCEF: 01/11/2023
Exhibit H
April 26, 2018, Email from Cresco’s Counsel and Attachment Thereto
Index No. 652343/2018 Motion Seq. Nos. 11 & 12
FILED: NEW YORK COUNTY CLERK 01/10/2023 10:09 PM INDEX NO. 652343/2018
1/10/23, 9:26 AM - Izower Lefton, LLP Mail Cresco / Fiorello
NYSCEF DOC. NO. 733 RECEIVED NYSCEF: 01/11/2023
Rachel lzower-Fadde
Cresco / Fiorello
1 message
Rafey Balabanian Thu, Apr 26, 2018 at 2:00 PM
To: Ronald Lefton
Ron,
As your client (and specifically, its Board) consider our proposal and next steps, I wanted to make you aware of current
market conditions, since Fiorello seems intent on establishing that conditions have changed such that the value of
Fiorello's License has increased from the time the parties entered into the LOI. As you can see from the below, Fiorello's
belief that market conditions are more favorable to it now than in January is simply not the case.
Below are snapshots of the stock prices of the most relevant publicly traded US cannabis operations. Also, I have
attached a spreadsheet detailing the stock prices for all publicly traded US cannabis operations on January 29th, April
26th and the difference between these values. As you can see, valuations are down across the board since the time that
Cresco and Fiorello negotiated the LOI - every single company has a lower valuation on April 26th than it did on January
29th.
bites"
While the industry did experience an uptick for two weeks following some "sound of supposed good news from the
former Speaker Boehner/Sen. Gardner/President Trump conversation, as well as Senator Schumer's support for national
decriminalization, without any legislation being passed or laws being changed, the bump was fleeting as the
company/license valuations came back down in less than a week. Hence, Cresco could make a much stronger argument
(supported by the public markets
- the best indicator of a company's value is obviously the price that its stock is selling
for) that the value of licenses and operations in the US, including the Fiorello license, is worth much less than when the
LOI was originally negotiated. But, that's not what Cresco is doing. As I've said several times now, rather Cresco is still
ready, willing and able to proceed as detailed in the binding LOI.
" iAnthus Capital - 1 of the 10 NY licensees.
Holdings
o Value 29 = $4.22/share
on Jan
o Value on April 26 = $3.14/share
o Difference = -25.6%
https://mail.google.com/mail/u/0/?ik=8d3f69efca&view=pt&search=all&permthid=thread-f%3A1598832799649131089%7Cmsg-f%3A15988326695640... 1/6
FILED: NEW YORK COUNTY CLERK 01/10/2023 10:09 PM INDEX NO. 652343/2018
1/10/23, 9:26 AM - Izower Lefton, LLP Mail Cresco / Fiorello
NYSCEF DOC. NO. 733 RECEIVED NYSCEF: 01/11/2023
a matetwataceei
GET On the App Store
Adarket
ITFlUF U.5.. 0T{
FAnthus Capital Holdings Inc. + watc=
Ls'.1Upda"ris Apr 26 2 !a923 zrn. EST " Del.gyecomte
" OPEN
$3.11
D.0108 0.35%
-n:-s _ c·_csë
$3.1o
3M = I h vot
'-i E-L
A&VANGD CMAr:NG
VOLUME:14K · 1813M
" Health Sciences
Liberty
o Value on Jan 29 = $1.35/share
o Value on April 26 = $.67/share
o Difference = -50.3%
https://mail.google.com/mail/u/0/?ik=8d3f69efca&view=pt&search=all&permthid=thread-f%3A1598832799649131089%7Cmsg-f%3A15988326695640... 2/6
FILED: NEW YORK COUNTY CLERK 01/10/2023 10:09 PM INDEX NO. 652343/2018
1/10/23, 9:26 AM - Izower Lefton, LLP Mail Cresco / Fiorello
NYSCEF DOC. NO. 733 RECEIVED NYSCEF: 01/11/2023
2'55 .a 9 K-
a matetwasonxam
arket
Liberty Health sciences inc. + wArc=
LipstUpointed-Apr -5 JGM E20:1m Epi " Dalaye mu(rte
E CLO5ED
50.67
-0.007 -1.03%
30.677
]M v 5 WDt.
VOLUM .:3303K ½ Day Avg. - 443N
" Terra Tech
o Value on Jan 29 = $5.02/share
o Value on April 26 = $2.72/share
o Difference = -45.8%
https://mail.google.com/mail/u/0/?ik=8d3f69efca&view=pt&search=all&permthid=thread-f%3A1598832799649131089%7Cmsg-f%3A15988326695640... 3/6
FILED: NEW YORK COUNTY CLERK 01/10/2023 10:09 PM INDEX NO. 652343/2018
1/10/23, 9:26 AM - Izower Lefton, LLP Mail Cresco / Fiorello
NYSCEF DOC. NO. 733 RECEIVED NYSCEF: 01/11/2023
2'fM5 .a 9 M'-
a matetwatchcom
GET -On the App Store
arket
TRTC U 5 · OTC
Terra Tech Corp, + wArcu
Upi2zted·Apr ,:5 209 ). ? p rn. (OT " Delaym-d
L.37.t quetç
G CLOSED
52.72
-0.0801 -Z 86%
$180
V.
AOVANCEO CH AR P. NG
VOtantE: 492.f 65 D2, Ave. · 635 N
" Kush Bottles - largestpackaging manufacturer focused exclusively on cannabis
o Value on Jan29 = $6.85/share
o Value on April 26 = $3.14/share
o Difference = -25.5%
https://mail.google.com/mail/u/0/?ik=8d3f69efca&view=pt&search=all&permthid=thread-f%3A1598832799649131089%7Cmsg-f%3A15988326695640... 4/6
FILED: NEW YORK COUNTY CLERK 01/10/2023 10:09 PM INDEX NO. 652343/2018
1/10/23, 9:26 AM - Izower Lefton, LLP Mail Cresco / Fiorello
NYSCEF DOC. NO. 733 RECEIVED NYSCEF: 01/11/2023
m-
B'SB .sit 9
a matetwas hxam
Adarket
U.S st ocks open higher. with Facebook fuelmg
Nascap advance ’
KSMB L..5. OK
Kush Battles inc. + wuc=
Lestupdated Apr 26 20129.42a m EDr - D'eloves5doate
* OPIN
5.10
0.045 0.89¾
3M T 5 % Vol.
I-e· 1 I,I. 1- si.;- ' II
ADVANCED CMART:NG
VOLUME-14.M HE Dar Avg -375 M
My recommendation would be for you to pass this along to your clients and its Board, so that they are fully informed
before they ultimately make a decision. Looking forward to hearing back from you by tomorrow.
Thanks.
Rafey
....
Rafey S. Balabanian | Edelson PC
123 Townsend Street, Suite 100
San Francisco, California 94107
415.234.5342 (direct) | 415.212.9300 (firm) | 415.373.9435 (fax)
rbalabanian@edelson.com | www.edelson.com
@EdelsonPC Edelson-PC Edelsontaw
@ Please consider the environment before printing this e-mail.
CONFIDENTIALITY AND LIABILITY FOR MISUSE.
https://mail.google.com/mail/u/0/?ik=8d3f69efca&view=pt&search=all&permthid=thread-f%3A1598832799649131089%7Cmsg-f%3A15988326695640... 5/6
FILED: NEW YORK COUNTY CLERK 01/10/2023 10:09 PM INDEX NO. 652343/2018
1/10/23, 9:26 AM - Izower Lefton, LLP Mail Cresco / Fiorello
NYSCEF DOC. NO. 733 RECEIVED NYSCEF: 01/11/2023
The information contained in this communication is the property of Edelson PC. It is confidential, may be attorney work product, attorney-client privileged or
otherwise exempt from disclosure under applicable law, and is intended only for the use of the addressee(s). Unauthorized use, disclosure or copying of this
communication or any part thereof is strictly prohibited. If you have received this communication in error, please notify Edelson PC immediately by return e-
mail and destroy this communication and all copies hereof, including all attachments.
Pursuant to requirements related to practice before the U.S. Internal Revenue Service, any tax advice contained in this communication (including any
attachments) is not intended to be used, and cannot be used, for purposes of (i) avoiding penalties imposed under the U.S. Internal Revenue Code or (ii)
promoting, marketing or recommending to another person any tax-related matter.
Industry Valuation Changes Since Jan 29th.xIsx
39K
https://mail.google.com/mail/u/0/?ik=8d3f69efca&view=pt&search=all&permthid=thread-f%3A1598832799649131089%7Cmsg-f%3A15988326695640... 6/6
FILED: NEW YORK COUNTY CLERK 01/10/2023 10:09 PM INDEX NO. 652343/2018
NYSCEF DOC. NO. 733 RECEIVED NYSCEF: 01/11/2023
Company Jan 29th Stock Price April 26th Stock Price Difference
iAnthus Capital Holdings $4.22 $3.14 -25.59%
Liberty Health Sciences $1.35 $0.67 -50.37%
Terra Tech $5.02 $2.72 -45.82%
Kush Bottles $6.85 $3.14 -54.16%
Sunniva $11.05 $6.55 -40.72%
Cannex (started trading 3/14) $1.07 $0.89 -16.82%
MPS Bioceutical $0.67 $0.60 -10.45%
CannaRoyalty $3.47 $3.24 -6.63%
Golden Leaf $0.36 $0.20 -44.44%
Friday Night $0.71 $0.43 -39.44%
Nutritional High $0.56 $0.30 -46.43%
FinCanna $0.73 $0.38 -47.95%
Body and Mind $0.91 $0.37 -59.34%
Average Stock Valuation Change= -37.55%
Preview
FILED: NEW YORK COUNTY CLERK 01/10/2023 10:09 PM INDEX NO. 652343/2018 NYSCEF DOC. NO. 733 RECEIVED NYSCEF: 01/11/2023 Exhibit H April 26, 2018, Email from Cresco’s Counsel and Attachment Thereto Index No. 652343/2018 Motion Seq. Nos. 11 & 12 FILED: NEW YORK COUNTY CLERK 01/10/2023 10:09 PM INDEX NO. 652343/2018 1/10/23, 9:26 AM - Izower Lefton, LLP Mail Cresco / Fiorello NYSCEF DOC. NO. 733 RECEIVED NYSCEF: 01/11/2023 Rachel lzower-Fadde Cresco / Fiorello 1 message Rafey Balabanian Thu, Apr 26, 2018 at 2:00 PM To: Ronald Lefton Ron, As your client (and specifically, its Board) consider our proposal and next steps, I wanted to make you aware of current market conditions, since Fiorello seems intent on establishing that conditions have changed such that the value of Fiorello's License has increased from the time the parties entered into the LOI. As you can see from the below, Fiorello's belief that market conditions are more favorable to it now than in January is simply not the case. Below are snapshots of the stock prices of the most relevant publicly traded US cannabis operations. Also, I have attached a spreadsheet detailing the stock prices for all publicly traded US cannabis operations on January 29th, April 26th and the difference between these values. As you can see, valuations are down across the board since the time that Cresco and Fiorello negotiated the LOI - every single company has a lower valuation on April 26th than it did on January 29th. bites" While the industry did experience an uptick for two weeks following some "sound of supposed good news from the former Speaker Boehner/Sen. Gardner/President Trump conversation, as well as Senator Schumer's support for national decriminalization, without any legislation being passed or laws being changed, the bump was fleeting as the company/license valuations came back down in less than a week. Hence, Cresco could make a much stronger argument (supported by the public markets - the best indicator of a company's value is obviously the price that its stock is selling for) that the value of licenses and operations in the US, including the Fiorello license, is worth much less than when the LOI was originally negotiated. But, that's not what Cresco is doing. As I've said several times now, rather Cresco is still ready, willing and able to proceed as detailed in the binding LOI. " iAnthus Capital - 1 of the 10 NY licensees. Holdings o Value 29 = $4.22/share on Jan o Value on April 26 = $3.14/share o Difference = -25.6% https://mail.google.com/mail/u/0/?ik=8d3f69efca&view=pt&search=all&permthid=thread-f%3A1598832799649131089%7Cmsg-f%3A15988326695640... 1/6 FILED: NEW YORK COUNTY CLERK 01/10/2023 10:09 PM INDEX NO. 652343/2018 1/10/23, 9:26 AM - Izower Lefton, LLP Mail Cresco / Fiorello NYSCEF DOC. NO. 733 RECEIVED NYSCEF: 01/11/2023 a matetwataceei GET On the App Store Adarket ITFlUF U.5.. 0T{ FAnthus Capital Holdings Inc. + watc= Ls'.1Upda"ris Apr 26 2 !a923 zrn. EST " Del.gyecomte " OPEN $3.11 D.0108 0.35% -n:-s _ c·_csë $3.1o 3M = I h vot '-i E-L A&VANGD CMAr:NG VOLUME:14K · 1813M " Health Sciences Liberty o Value on Jan 29 = $1.35/share o Value on April 26 = $.67/share o Difference = -50.3% https://mail.google.com/mail/u/0/?ik=8d3f69efca&view=pt&search=all&permthid=thread-f%3A1598832799649131089%7Cmsg-f%3A15988326695640... 2/6 FILED: NEW YORK COUNTY CLERK 01/10/2023 10:09 PM INDEX NO. 652343/2018 1/10/23, 9:26 AM - Izower Lefton, LLP Mail Cresco / Fiorello NYSCEF DOC. NO. 733 RECEIVED NYSCEF: 01/11/2023 2'55 .a 9 K- a matetwasonxam arket Liberty Health sciences inc. + wArc= LipstUpointed-Apr -5 JGM E20:1m Epi " Dalaye mu(rte E CLO5ED 50.67 -0.007 -1.03% 30.677 ]M v 5 WDt. VOLUM .:3303K ½ Day Avg. - 443N " Terra Tech o Value on Jan 29 = $5.02/share o Value on April 26 = $2.72/share o Difference = -45.8% https://mail.google.com/mail/u/0/?ik=8d3f69efca&view=pt&search=all&permthid=thread-f%3A1598832799649131089%7Cmsg-f%3A15988326695640... 3/6 FILED: NEW YORK COUNTY CLERK 01/10/2023 10:09 PM INDEX NO. 652343/2018 1/10/23, 9:26 AM - Izower Lefton, LLP Mail Cresco / Fiorello NYSCEF DOC. NO. 733 RECEIVED NYSCEF: 01/11/2023 2'fM5 .a 9 M'- a matetwatchcom GET -On the App Store arket TRTC U 5 · OTC Terra Tech Corp, + wArcu Upi2zted·Apr ,:5 209 ). ? p rn. (OT " Delaym-d L.37.t quetç G CLOSED 52.72 -0.0801 -Z 86% $180 V. AOVANCEO CH AR P. NG VOtantE: 492.f 65 D2, Ave. · 635 N " Kush Bottles - largestpackaging manufacturer focused exclusively on cannabis o Value on Jan29 = $6.85/share o Value on April 26 = $3.14/share o Difference = -25.5% https://mail.google.com/mail/u/0/?ik=8d3f69efca&view=pt&search=all&permthid=thread-f%3A1598832799649131089%7Cmsg-f%3A15988326695640... 4/6 FILED: NEW YORK COUNTY CLERK 01/10/2023 10:09 PM INDEX NO. 652343/2018 1/10/23, 9:26 AM - Izower Lefton, LLP Mail Cresco / Fiorello NYSCEF DOC. NO. 733 RECEIVED NYSCEF: 01/11/2023 m- B'SB .sit 9 a matetwas hxam Adarket U.S st ocks open higher. with Facebook fuelmg Nascap advance ’ KSMB L..5. OK Kush Battles inc. + wuc= Lestupdated Apr 26 20129.42a m EDr - D'eloves5doate * OPIN 5.10 0.045 0.89¾ 3M T 5 % Vol. I-e· 1 I,I. 1- si.;- ' II ADVANCED CMART:NG VOLUME-14.M HE Dar Avg -375 M My recommendation would be for you to pass this along to your clients and its Board, so that they are fully informed before they ultimately make a decision. Looking forward to hearing back from you by tomorrow. Thanks. Rafey .... Rafey S. Balabanian | Edelson PC 123 Townsend Street, Suite 100 San Francisco, California 94107 415.234.5342 (direct) | 415.212.9300 (firm) | 415.373.9435 (fax) rbalabanian@edelson.com | www.edelson.com @EdelsonPC Edelson-PC Edelsontaw @ Please consider the environment before printing this e-mail. CONFIDENTIALITY AND LIABILITY FOR MISUSE. https://mail.google.com/mail/u/0/?ik=8d3f69efca&view=pt&search=all&permthid=thread-f%3A1598832799649131089%7Cmsg-f%3A15988326695640... 5/6 FILED: NEW YORK COUNTY CLERK 01/10/2023 10:09 PM INDEX NO. 652343/2018 1/10/23, 9:26 AM - Izower Lefton, LLP Mail Cresco / Fiorello NYSCEF DOC. NO. 733 RECEIVED NYSCEF: 01/11/2023 The information contained in this communication is the property of Edelson PC. It is confidential, may be attorney work product, attorney-client privileged or otherwise exempt from disclosure under applicable law, and is intended only for the use of the addressee(s). Unauthorized use, disclosure or copying of this communication or any part thereof is strictly prohibited. If you have received this communication in error, please notify Edelson PC immediately by return e- mail and destroy this communication and all copies hereof, including all attachments. Pursuant to requirements related to practice before the U.S. Internal Revenue Service, any tax advice contained in this communication (including any attachments) is not intended to be used, and cannot be used, for purposes of (i) avoiding penalties imposed under the U.S. Internal Revenue Code or (ii) promoting, marketing or recommending to another person any tax-related matter. Industry Valuation Changes Since Jan 29th.xIsx 39K https://mail.google.com/mail/u/0/?ik=8d3f69efca&view=pt&search=all&permthid=thread-f%3A1598832799649131089%7Cmsg-f%3A15988326695640... 6/6 FILED: NEW YORK COUNTY CLERK 01/10/2023 10:09 PM INDEX NO. 652343/2018 NYSCEF DOC. NO. 733 RECEIVED NYSCEF: 01/11/2023 Company Jan 29th Stock Price April 26th Stock Price Difference iAnthus Capital Holdings $4.22 $3.14 -25.59% Liberty Health Sciences $1.35 $0.67 -50.37% Terra Tech $5.02 $2.72 -45.82% Kush Bottles $6.85 $3.14 -54.16% Sunniva $11.05 $6.55 -40.72% Cannex (started trading 3/14) $1.07 $0.89 -16.82% MPS Bioceutical $0.67 $0.60 -10.45% CannaRoyalty $3.47 $3.24 -6.63% Golden Leaf $0.36 $0.20 -44.44% Friday Night $0.71 $0.43 -39.44% Nutritional High $0.56 $0.30 -46.43% FinCanna $0.73 $0.38 -47.95% Body and Mind $0.91 $0.37 -59.34% Average Stock Valuation Change= -37.55%