Harvest Health & Recreation Inc. filed suit requesting termination and rescission of its merger deal with Falcon International Inc.

In the lawsuit, filed in U.S. Federal Court in the District of Arizona, Harvest Health also asked for the return of money which the Tempe, Ariz.-based medicinal cannabis company paid to Falcon under the deal.

Harvest alleged that Falcon failed to meet certain legal obligations, including providing auditable financial records. Harvest also said current market conditions make it difficult to operate in the U.S. state profitably.

Under the merger deal, Harvest Health agreed to acquire Falcon for $240 million to gain additional cannabis licenses and to expand production in California.