Ohio-based marijuana retailer Green Growth Brands said Wednesday it has filed for insolvency protection in Canada.
The financially troubled multistate operator – with operations in Florida, Massachusetts and Nevada – trades on the U.S. over-the-counter markets as GGBXF and on the Canadian Securities Exchange as GGB.
Former Green Growth Brands CEO Peter Horvath, who resigned from the company in March, was recently appointed CEO of marijuana magazine publisher High Times Holding Corp.
Green Growth Brands received an initial protection order from the Ontario Superior Court of Justice under the Companies’ Creditors Arrangement Act, the federal bankruptcy and restructuring law in Canada.
Green Growth Brands’ U.S. subsidiaries, collectively known as GGB Group, “have always been cash-flow negative,” according to court filings that say the group faced “liquidity issues” starting in early 2019.
Efforts to find more financing “coincided with the cannabis market being less robust than anticipated, and as a result, investors becoming concerned about investing in cannabis operations,” according to a filing.
Green Growth Brands now has more than $100 million in secured debt and faces lawsuits in the U.S. and Canada.
The company has entered into a debtor-in-possession loan deal worth up to $7.2 million with one of its secured lenders, All Js Greenspace. All Js will also act as a stalking horse bidder if the court approves a sale and investment-solicitation process.
Green Growth Brands unsuccessfully attempted a hostile takeover of Canadian cannabis producer Aphria in late 2018 and early 2019.