As part of its ongoing bankruptcy, marijuana multistate operator The Cannabist Co. will close two New Jersey cannabis cultivation sites and sell off three retailers to an erstwhile competitor, according to a news release.
And continuing an ongoing acquisition spree, Vireo Growth said earlier this week it will buy former Cannabist properties in five states, including New Jersey, for up to $35 million.
But in New Jersey, that pickup includes only retailers. As a result, two Cannabist cultivation sites in Vineland in the southern part of the state will close, with an estimated 86 workers laid off, reported the Cherry Hill Courier Post, citing a federally mandated layoff notice.
According to The Courier Post, Cannabist’s New Jersey operations generated $43.5 million in revenue last year – almost 16% of the company’s total revenue.
Why are cannabis cultivation workers losing their jobs?
However, according to court documents, Cannabist still owes $15.9 million on a loan associated with the Vineland cultivation sites. Unless the property can be sold, it will be returned to East West Bank, the lender on that deal, according to documents.
The latest Cannabist news comes on the heels of an impending closure, announced earlier this week, of its Denver-based cultivation and manufacturing operation.
Approximately 50 workers will lose their jobs in Colorado, MJBizDaily reported.
Headquartered in Canada, The Cannabist Co. filed for Chapter 15 bankruptcy protections, available to multinational debtors, earlier this year.
The company cited debt to investors and to the Internal Revenue Service in excess of $270 million. A U.S. Bankruptcy Court judge granted those protections on May 9.
What’s marijuana MSO Vireo Growth’s latest expansion?
According to Vireo, the purchase of The Cannabist’s New Jersey retail stores will give the company “approximately 230” retail locations in 15 states across the country.
In a statement, Vireo CEO John Mazarkis said the purchase of “select Cannabist assets meaningfully expands our operational footprint, strengthens our vertically integrated platform, and adds a highly experienced team along with operations in new markets.”
In addition to Cannabist’s assets, other struggling companies to be scooped up by Vireo include:
- Eaze, the former “Uber of Weed,” with locations in California and Florida
- Colorado-based multistate operator Schwazze
- PharmaCann’s Colorado assets
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What assets did bankrupt MSO The Cannabist Co. sell off?
Cannabist has spent much of the past six months selling off assets to satisfy creditors. Major transactions include the sale of its vertically integrated medical cannabis permit in Virginia to an affiliate of a Boston-based hedge fund.
Some assets could not be sold.
The company surrendered its vertically licensed permit in New York State and “wound down” its MMJ operation in Pennsylvania, according to filings.
With “sustained negative cash flows” in Pennsylvania and New York, those permits “received insufficient interest” from potential buyers, a bankruptcy monitor said in filings.
“No actionable transactions for these markets were received,” the monitor said.
