The recent foreclosure and sale of Theraplant, one of four cannabis producers licensed in Connecticut, should not impact the supply of product to the state’s commercial and medical cannabis markets, according to the Department of Consumer Protection.
The company’s ownership changed hands from Greenrose Holding Company to NewCo, a subsidiary of DXR Holdco, according to a July 21 filing with the Securities and Exchange Commission.
In a statement, DCP spokesperson Kaitlyn Krasselt said that state law required cannabis businesses to seek the agency’s approval before such ownership changes in a process that requires new backers to undergo a background check.
“Theraplant and their new ownership have submitted and registered all appropriate backers,” Krasselt said. “The change did not impact their operations and they are continuing to supply the market without incident.”
Theraplant, along with Advanced Grow Labs, Curaleaf, and CTPharma, supply products for Connecticut’s long-standing medical marijuana program as well as its commercial dispensaries since the recreational adult-use market launched in January. Greenrose, a multi-state cannabis business, acquired Theraplant in 2021.
However, Greenrose has been entangled in financial trouble related to debt interest obligations and collections litigation in Arizona. Last August, the company disclosed $24 million in losses to the SEC during the first half of 2022.
The company’s foreclosure agreement transfers Theraplant to NewCo and satisfies about $4.1 million in obligations, according to the July SEC filing, while another $5 million in obligations remain outstanding.
Theraplant did not immediately respond to a request for comment Monday.
Its ownership turnover comes amid incremental but steady growth in sales numbers from Connecticut’s commercial cannabis market. Consumers spent roughly $24 million on cannabis in June. Those figures were split between $12.5 million in commercial sales and $11.3 million in medical transactions, according to the state.
As of earlier this month, the Consumer Protection Department was still imposing a transaction limit on commercial sales of ¼ ounce per purchase. The temporary cap is designed to ensure adequate supply of products to support both the medical and commercial markets.
In a statement on Theraplant’s ownership turnover, Krasselt said the agency reviewed the sale for any impact on supply.
“Maintaining appropriate market supply, particularly for medical patients, remains a priority for the department and once notified of a proposed change in ownership the department reviews the transaction for any supply impacts and works with licensees to ensure adequate supply,” she said.
H/T: ctnewsjunkie.com
