Marijuana operator Gold Flora facing receivership amid financial challenges

(This story was updated at 5:07 p.m. ET Wednesday with new comments from Gold Flora’s CEO and results of a special shareholders meeting.)

California-based marijuana operator Gold Flora Corp. is facing receivership as it grapples with financial challenges.

Financial recovery firm Global Assets Liens & Foreclosure filed an ex parte application for receivership in Santa Barbara Superior Court against Gold Flora, which owes more than $236,725 in unpaid invoices.

The hearing is scheduled for Nov. 27, according to a Global Assets news release.

Gold Flora disputes claims

Gold Flora’s CEO took exception with Global Assets’ announcement.

“The court has dismissed the claims brought by this creditor, and contrary to their filing, Gold Flora is not under any receivership at this time,” CEO and Chair Laurie Holcomb said in a statement emailed to MJBizDaily on Wednesday.

“We have been working in good faith to resolve the matter, unfortunately, this creditor chose to proceed with this inflated claim as a tactic to recover significantly more than any amount that we believe may be owed to Herbl and is not working with the company to substantiate its claim.

“This aggressive creditor has also filed complaints against several other California dispensaries doing business with Herbl prior to its dissolution.”

Herbl, a major licensed California marijuana distribution company, collapsed in June 2023, and its receivership sold certain assets for $1.4 million at auction this past March.

Holcomb’s statement further explained that, “as noted in our filings, the motions set forth in our recent special shareholder meeting relate to updating our share structure to comply with the covenants of our lenders and in no way relate to any such near-term solvency issues.”

Costa Mesa-based Gold Flora said in a news release issued Wednesday that company shareholders “approved by a majority” of the outstanding shares of common stock an “amendment to the Company’s Certificate of Incorporation to effect a reverse stock split of the shares of Common Stock at a ratio of not less than 1-for-2 and not greater than 1-for-50, with the exact ratio of, effective time of and decision to implement the reverse stock split to be determined by the Board of Directors (the ‘Reverse Stock Split’).”

Meanwhile, Global Assets is asking that Kevin Singer of Los Angeles-headquartered Receivership Specialists be appointed as receiver.

Singer has been appointed receiver in proceedings involving cannabis companies such as Herbl, High Times and, most recently, StateHouse Holdings.

Gold Flora, which is operating under a limited receivership in Delaware, has incurred losses exceeding $37 million, according to the Global Assets release.

During a Nov. 14 earnings call, Gold Flora Chief Financial Officer Marshall Minor said the company is reducing payroll by 10% to help cut costs.

Gold Flora considering expansion

Despite the company’s financial difficulties, Holcomb said Gold Flora is planning to expand, with a focus on its newly branded line of Gramlin cannabis products.

Last year, Gold Flora merged with TPCO Holdings, which operates as The Parent Co., in an all-stock deal.

The combined companies are called New Parent and operate as Gold Flora Corp.

The deal gave Gold Flora access to a $5 million line of credit from The Parent Co. at a 10% annual interest rate secured by Gold Flora assets.

The merger was expected to streamline operations and generate annualized savings of $20 million to $25 million.