A Delaware court has issued a ruling in a complex business dispute involving Accelerant Twister, LLC and Marjo, LLC, related to the development of an automated cannabis cone-rolling machine. The court's decision addresses multiple claims of contract breaches, governance issues, and fiduciary duties that arose among the co-founders of the company. This ruling could have significant implications for the parties involved and the cannabis industry as a whole.

The case, Accelerant Twister, LLC v. Marjo, LLC and John T. Sullivan (C.A. No. 2023-0887-LWW), was filed on October 30, 2026, in the Court of Chancery of Delaware. It stems from a partnership formed in 2019 between engineer John T. Sullivan and three other individuals—Michael Borom, Grant Schuster, and Alan Ellman—who aimed to commercialize Sullivan's concept for an automated cannabis cone-rolling machine. The court's ruling, issued on October 30, 2026, comes after a trial that examined the various claims and counterclaims made by both sides.

Background

Accelerant Twister, LLC was established to develop and market a machine designed to automate the rolling of cannabis cones. Sullivan, through his company Marjo, LLC, provided the initial designs and intellectual property for the machine. The partnership began with optimism, but as development progressed, issues arose regarding funding, management decisions, and contractual obligations.

In 2021, the three founders, Borom, Schuster, and Ellman, formed a new entity called Accelerant Holding, LLC, into which they transferred their equity from Twister, leaving Marjo as the only original member without a stake in the new entity. This restructuring led to disputes over the validity of the agreements and the treatment of Marjo's rights under the original contracts.

The Ruling

The court ruled on multiple claims made by both parties. On the contract claims, Marjo prevailed in asserting that the license agreement with Twister was valid and enforceable. The court found that Twister breached this agreement by failing to pay Marjo the required $1 million milestone payment. As a result, Marjo is entitled to $1 million in damages, along with interest and the return of specific property related to the machine's development.

The court stated, "Marjo is entitled to $1 million in damages plus contractual interest and the return of the early prototype, demonstration unit, and original drawings."

However, the court also found that Twister's management acted improperly by approving a revolving credit agreement with Holding without the necessary member vote. The court ruled that the interest charged on this credit was excessive, leading to a breach of fiduciary duty by the majority managers of Twister.

Impact

This ruling has significant implications for the parties involved, particularly in terms of financial obligations and governance structures within the companies. The court's decision reinforces the importance of adhering to contractual obligations and maintaining proper governance practices in business partnerships. It also highlights the potential consequences of failing to uphold fiduciary duties, especially in cases where conflicts of interest arise.

Moving forward, the ruling may set a precedent for similar disputes in the cannabis industry, where partnerships and joint ventures are common. Companies must be vigilant in ensuring that their agreements are honored and that all parties are treated fairly to avoid costly litigation.

What's Next

While the court's ruling addresses many of the immediate concerns in this case, it is possible that the parties may seek to appeal certain aspects of the decision. Additionally, there may be related cases pending as the parties navigate the aftermath of this ruling and its implications for their respective businesses.