One of the most controversial sponsorship deals in Australian sporting history, between an NRL club and a medicinal cannabis clinic, has ended.

The Dolphins are seeking a new sponsor for next season after severing ties with their existing partner, Alternaleaf. The firm – described on the website of its owner, Montu, as “Australia’s largest medical cannabis clinic” – is under the microscope for potentially breaching the Therapeutic Goods Act. While medicinal cannabis is legal in Australia, the TGA bans advertising of prescription medicine such as medicinal cannabis, or consultations for medical cannabis as part of a health service.

The Therapeutic Goods Administration (TGA) launched court proceedings against Montu in April, forcing the Dolphins to cover up the Alternaleaf branding on their jerseys. It led to farcical scenes for their round seven clash against Parramatta in Darwin when the white tape covering the logo – hastily applied after the TGA made the ruling the night before – came off most of the jerseys in the hot and humid conditions.

The Dolphins and Alternaleaf had planned to continue the partnership, but the club’s inability to promote the brand effectively forced the parties to part company.

“There was some noise around our partnership earlier this year, and we worked closely with Alternaleaf and the TGA to find a workable resolution,” Dolphins chief executive Terry Reader said.

“Given the challenges with the regulations, our partnership concluded. We still have a great relationship with Alternaleaf, and were circumstances to change, we would certainly be open to working with them again in the future.”

Cannabis products are banned by the World Anti-Doping Agency, although the Dolphins’ sponsorship is not related to medical treatment for its players.

“While our Alternaleaf partnership with the Dolphins is no longer active, we maintain a positive and ongoing relationship with them, and there remains motivation to pursue a partnership together in the future,” said Montu spokesperson and director of public affairs Kelly King.