Queenstown's Good Group Ltd has issued defamation proceedings against the editor and owner of the community newspaper the Wanaka Sun.
It is believed action is also being taken against an anti-Kronic campaigner, Nigel Greening.
Wanaka Sun owner Aaron Heath and editor Sue Wards confirmed yesterday they had been served legal documents by Good Group and were taking legal advice.
It is believed the action stems from an article published in the Wanaka Sun on the cannabis substitute Kronic.
"They have issued proceedings in defamation and these proceedings will be defended vigorously," Ms Wards said yesterday.
Mr Heath said he understood Mr Greening had been issued with similar proceedings.
Mr Greening was out of the country yesterday and could not be contacted.
Good Group chief executive Russell Gray, of Queenstown, is on leave until tomorrow and was not available for comment.
Attempts to obtain comment from another company executive were not successful.
In an Otago Daily Times report on Saturday, July 16, about Kronic, Mr Gray said: "We actually support the Government's crackdown on it, making it a restricted product, as we believe the best place to sell it is a place that's used to selling these products."
Mr Gray also said he would await the outcome of Associate Health Minister Peter Dunne's proposed legislation to govern sales of legal cannabis substitutes.
He was clear that if the product remained legal to sell, he would sell it.
"We don't see it as any different from alcohol or tobacco. You have to be over 18 to purchase any of them and if you are at the legal age, you have that choice," Mr Gray said.
Mr Greening's campaign against Kronic began at the end of last month and included posters and a published interview with the Wanaka Sun.
The Government has started a process to amend the Misuse of Drugs Act, the Ministry of Health has commissioned forensic tests to better understand the chemical composition of Kronic, and police have been operating "stings" on retailers to check they are not selling Kronic to underage customers.
Wanaka Senior Sergeant Allan Grindell said yesterday no stings had taken place in Wanaka.
"We have received no complaints about selling it to underage people," he said.
