Green Dragon is shutting down its cannabis cultivation and dispensary operations in Florida and Colorado amid a legal dispute with parent company Eaze, which had its assets foreclosed on by lenders in August.
Green Dragon, which was acquired by the California-based cannabis delivery company in 2021, filed Worker Adjustment and Retraining Notification (WARN) notices in both states on Oct. 16, indicating its preparations for market exits by the end of the year.
In Florida, Green Dragon filed a WARN notice that lists 113 workers, including 30 cultivation technicians and 19 hand trimmers at the company’s 400,000-square-foot medical cannabis grow facility in Palatka, according to the state’s Department of Commerce. The company also plans to close its 39 medical dispensary locations in the state.
The planned termination date is Dec. 31, 2024, because “The employer lost all of its assets in a public auction and is shutting down,” according to the WARN notice filed by Eaze executive Trey Handley. “All terminations covered under this notice are permanent and all employment at the site/plant will be terminated. No bumping rights exist and there is no union representation.”
In Colorado, Green Dragon filed a WARN notice that lists 59 workers at the company’s 92,000-square-foot cultivation facility in Denver, all of whom are in positions that include harvest or packaging roles and whose terminations will be permanent by Dec. 31, 2024, according to the state’s Department of Labor and Employment. The notice lists the United Food and Commercial Workers Local 7 as the union representative for the employees.
Green Dragon also plans to shut down its 17 dispensaries in Colorado, but it did not file WARN notices for its retail locations because employee counts at each store are under a 50-worker threshold requirement for those notices, Eaze CEO Corry Azzalino told Business Den.
San Francisco-based Eaze Technologies Inc., the largest cannabis delivery service in the country with operations throughout California and Michigan, announced earlier this month that it also is winding down operations with plans to lay off roughly 500 union workers.
RELATED: Eaze ‘Winding Down’ Operations, Will Update Employees About Cannabis Delivery Service’s Future
These shutdowns for Eaze and Green Dragon come after Eaze’s assets were foreclosed on by lender James Clark, a computer tech billionaire who co-founded Netscape. Clark purchased the assets at a public action on Aug. 6, 2024, for $54 million through his company FoundersJT LLC, which is co-controlled by fellow Eaze stockholder Thomas Jermoluk.
FoundersJT provided Eaze with a roughly $37 million loan in 2022 that included the right to seize control of the company if it failed to meet monthly revenue targets, according to Law360.
That loan led to Eaze investors, including former Green Dragon owner and co-CEO Andrew Levine, to file a lawsuit. Levine’s suit alleges that Clark and Jermoluk conspired to acquire the Eaze assets below market value and that the Eaze blocked him from accessing company records related to the purchase agreement.
In late 2021, when Eaze and Green Dragon were in the process of merging, Eaze was valued at more than $700 million, according to TechCrunch.
Green Dragon’s multistate shutdowns come as Colorado’s licensed dispensaries are on pace to record $1.42 billion in sales this year, representing a 7% year-over-year decline and a 36% decrease from a 2021 market peak, according to the state’s Department of Revenue.
In Florida’s roughly $2 billion medical market, Green Dragon operates nearly 6% of the state’s dispensaries as the sixth largest vertically integrated operator, according to the Florida Office of Medical Marijuana Use.
H/T: www.cannabisbusinesstimes.com
