Cresco Labs’ Co-Founder Settles Suit Alleging He Created ‘Toxic Working Environment,’ Used Company Secrets For New Venture

Cresco agreed to drop the suit after reaching “a mutual settlement agreement”

A major chicago-based cannabis firm reached a settlement with its co-founder last week after claiming in a lawsuit that he used company secrets to launch a new venture when he was ousted amid allegations of harassment and “misogynistic conduct.”

The lawsuit, filed Jan. 29 by Cresco Labs in the Supreme Court of British Columbia, alleged that Joseph Caltabiano engaged in a “litany of misconduct” as he helped build the company into a multi-state behemoth. After resigning under duress, Caltabiano teamed with another former executive and allegedly used “confidential” company information to help start a competing firm, Choice Consolidation Corp., the suit claims.

On Thursday, Cresco agreed to drop the suit after reaching “a mutual settlement agreement,” according to spokesman Jason Erkes. Erkes said the suit’s claims “have been resolved,” namely a dispute over removing Caltabiano from cannabis licenses Cresco holds in other states.

Meanwhile, a spokeswoman for Choice Consolidation contested the allegations in the lawsuit.

“Had it proceeded, Mr. Caltabiano and Choice Consolidation would have denied the allegations as untrue,” said Shawna McGregor, who noted the agreement also ended other litigation, including a suit Cresco brought in Cook County.

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