Green Dragon, one of Colorado’s largest cannabis companies, is preparing to cease operations.
The company said in a notice to the state labor department last week that it plans to lay off all 59 workers at its 92,000-square-foot grow facility at 830 Wyandot St. in Denver by year end.
Cory Azzalino, CEO of Eaze, a California-based cannabis delivery firm that is also Green Dragon’s parent company, told BusinessDen Friday morning that all 17 Green Dragon retail locations in Colorado will close by then too.
‘We didn’t have to file a WARN in Colorado for those,” he said, citing the employee count at each store being under a 50-worker threshold. “But those workers are part of the existing entities that will be closing.”
Green Dragon will also close its 400,000-square-foot medical marijuana grow operation in Florida, as well as its 39 Sunshine State dispensaries as part of the shutdown, Azzalino said.
Green Dragon is one of the biggest players in the Colorado weed world, according to Christopher Smith of Desarollo Real Estate, a firm that focuses on cannabis-related properties.
Green Dragon and Eaze recently got a new owner. An ownership group involving Jim Clark, a billionaire founder of the defunct tech firm Netscape, foreclosed on the business’ assets in August for $54 million, according to Green Market Report. His company, FoundersJT, loaned the company $36.9 million in 2022.
Azzalino, the CEO, described that process as akin to a bankruptcy sale, saying marijuana’s illegal status on the federal level complicates the use of bankruptcy.
“If we weren’t cannabis, it would’ve likely been Chapter 11,” he said.
Clark declined to comment when reached by email. Azzalino said he is unsure what Clark plans to do, but he is “certain” that what is currently Green Dragon will not exist in the future. He said the new ownership group is in wait-and-see mode.
“Result of the election will play a major role in that, specifically Amendment 3 in Florida, which could be a catalyzing event,” he said.
Amendment 3 would legalize recreational marijuana in the state. The state will vote on it Nov. 5.
Eaze acquired Green Dragon roughly three years ago, but in mid-2023, Green Dragon co-founders Lisa Leder, Andrew Levine and Alex Levine sued the company for fraud. They alleged Eaze misrepresented its finances in the lead up to the sale and wrongfully fired the trio in February 2023, court documents show. The case was dismissed months later in November.
Levine, still a shareholder in the company, filed another civil suit against Eaze on Aug. 6, court records show. The suit aims to investigate whether Clark and board member Thomas Jermoluk conspired to acquire the company’s assets at below-market value, according to Green Market Report.
Green Dragon’s Denver grow facility, meanwhile, just got a new landlord. The building at 830 Wyandot St. was bought this month by Don Ball, a Texas-based real estate investor, for $11.5 million, public records show.
Ball told BusinessDen Friday he has yet to hear from his tenant, but is not too worried because Green Dragon is locked into an “ironclad” lease.
He bought the building from Best Properties LLC, a company headed by Leder. She also listed a Florida grow facility property for sale over the summer, but decided to pull it off the market in recent months because of the prospect it might fetch more if Amendment 3 passes, Ball said.
H/T: www.denverpost.com
