Dutchie Countersues ScanSource Over $17.1M Unpaid Goods Claim

Dutchie accused ScanSource of breaching contract and delays.

E-commerce cannabis company Dutchie filed a countersuit against tech distributor ScanSource amid an ongoing $24.7 million legal dispute.

ScanSource filed a lawsuit against the cannabis software firm a month ago, alleging it didn’t purchase goods it had ordered worth approximately $17.1 million.

According to Law360, Dutchie’s parry move accuses ScanSource of not only breaching its contract but also of delaying the placement of orders for 35,000 tech products that ScanSource purchased from a company called Elo Touch Solutions, notably touchscreen monitors.

The counterclaim indicates that Dutchie conveyed the time-sensitive nature of the delivery of these orders, but ScanSource’s alleged delays compounded Dutchie’s delivery timeline, which already spanned six to eight months.

Adding to the conflict, ScanSource requested a 12% annual interest rate on the multimillion dollar order. Dutchie refuted this claim, stating such terms were never originally agreed upon.

“ScanSource’s attempt to compound the harm to Dutchie is not in good faith,” Dutchie said in the Aug. 31 filing.

According to court documents, the 2021 agreement had ScanSource assisting Dutchie in procuring point-of-sale customer display monitors and stands. ScanSource then apparently required a supplemental agreement, ensuring noncancellation and nonrefundability of products.

Dutchie alleges that, after this new agreement, ScanSource placed unauthorized additional orders.

The countersuit also challenges the assertion regarding the uniqueness of certain “custom” products, suggesting the products could potentially serve other clients with minor adjustments.

“ScanSource failed to manage the relationship as expected, failed to provide valuable feedback or management during the course of the parties’ relationship, and left Dutchie to manage a relationship with Elo (while simultaneously refusing to allow a direct contractual relationship between those parties),” the company said.

“ScanSource’s bare involvement in the process was not in good faith, and Dutchie failed to receive the benefit of its bargain with ScanSource, and was harmed by its lack of management and ongoing delays.”

Both companies have yet to issue public statements regarding the legal proceedings.


Adam Jackson

Adam Jackson writes about the cannabis industry for the Green Market Report. He previously covered the Missouri Statehouse for the Columbia Missourian and has written for the Missouri Independent. He most recently covered retail, restaurants and other consumer companies for Bloomberg Business News. You can find him on Twitter at @adam_sjackson and email him at adam.jackson@crain.com.

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