Less than a year after the parent company of cannabis cultivator and producer Theraplant began marketing itself for sale amid funding concerns, a Waterbury judge this week approved a foreclosure involving the company’s Watertown property and another in Arizona.
Greenrose Holding Co., the New York-based parent company of Theraplant, submitted a filing with the U.S. Securities and Exchange Commission on July 24 stating it completed the foreclosure of its assets this month. Waterbury Superior Court Judge Walter Spader approved the strict foreclosure Wednesday, according to court documents.
The issue with Greenrose’s finances dates back to 2022, when the company told the SEC that it didn’t have enough working capital to satisfy its liabilities.
On Nov. 10, the company entered into an agreement with its lenders to essentially sell off parts, or all, of the business to pay back the financial institutions that loaned it money.
On Jan. 9, the company told the SEC it had agreed with its lenders to extend the marketing period for its potential sale.
After not finding a buyer, the company told the SEC in March it had entered into a strict foreclosure agreement with its lenders, Delaware-based DXR Finance HoldCo.
According to the company’s more recent filing with the SEC on July 24, Greenrose and DXR Finance HoldCo “completed the disposition of assets and closed the foreclosure transaction” for Watertown-based Theraplant and Arizona cultivation company True Harvest on July 21.
According to the filing, the ownership of the two companies has “transferred and conveyed its respective Transferred Collateral to NewCo in exchange for satisfaction in full and discharge of the applicable obligations and assumption by NewCo of certain liabilities.”
Upon completion of a judicial foreclosure of certain real property, the SEC filing states that $4.1 million of the obligations will be satisfied in full. Greenrose will still be on the hook for $5 million of outstanding obligations unless it becomes a party in the foreclosure agreement, which the company has indicated it will be.
According to information from the state Department of Consumer Protection, cannabis establishments are required to notify and receive approval from the department prior to any change in ownership, which includes the addition, removal or replacement of backers. Any new backers associated with the ownership change must register with the department and undergo a background check.
“Theraplant and their new ownership have submitted and registered all appropriate backers,” DCP Communications Director Kaitlyn Krasselt said. “The change did not impact their operations and they are continuing to supply the market without incident.”
Theraplant, along with Curaleaf, Verano Holdings’ CTPharma, and Green Thumb Industries’ Advanced Grow Labs, were picked to supply the state’s medical marijuana program when it launched several years ago. More than six months into recreational cannabis sales, the four companies remain the only fully licensed companies allowed to grow and produce marijuana products for both markets.
Greenrose bought Theraplant in March 2021.
State officials told the Hartford Business Journal in December that, even if one of the four existing cannabis producers were to go out of business and drop the state’s total growing and manufacturing capacity below the 250,000-square-foot minimum requirement, the recreational market would remain open.
H/T: HartfordBusiness.com
