One of California’s leading legal cannabis companies announced Thursday that it is seeking receivership, looking to sell off all of its assets as it faces mounting financial losses and eventually to shut down the sprawling business.
Gold Flora CEO Laurie Holcomb said in a Thursday news release that it was “a difficult but correct decision” to sell off the company’s 16 dispensaries and 100,000-square-foot cultivation campus through a voluntary receivership in Los Angeles. Holcomb said the company has over $100 million in annual revenue but is facing mounting lawsuits related to a business merger and debts that make the company unsustainable.
Cannabis companies across the state have failed over the past two years as expensive regulations, high taxes and competition from the illicit market make the business increasingly tough.
Gold Flora owns some of the state’s leading dispensaries, like Airfield Supply Company in San Jose and Calma in West Hollywood, as well as multiple brands and large growing facilities in Desert Hot Springs and San Jose. The company said it expects to keep operating these subsidiaries as it seeks to sell off all of its assets through an “an orderly sale of the business.”
Cannabis companies are blocked from declaring bankruptcy, the most common tool used to shut a failing business down, because of federal prohibition of the drug. Instead, companies usually go through court-monitored receiverships, where an attorney auctions off the company’s assets to repay investors and creditors.
Gold Flora merged in 2023 with TPCO, another California pot company that burned through $575 million and was partnered with rapper Jay-Z before it failed. Gold Flora still has the rights to distribute Jay-Z’s Monogram cannabis brand in California, though it’s not clear if it’s still selling the products. Holcomb said in a news release that many of the company’s liabilities are “due to lawsuits we inherited with the TPCO business combination.” Gold Flora said in a 2024 financial filing — the most recent posted to its website — that it was facing lawsuits from investors and business partners in Orange County, Delaware and Santa Clara County.
The company expects to be placed into receivership in Los Angeles Superior Court.
H/T: www.sfgate.com
