The parent company of The+Source dispensaries has filed for bankruptcy protection in Canada because of a “severe liquidity crisis” that was exacerbated by pandemic-related shutdowns, although company officials say the filing is not expected to affect day-to-day operations in Nevada.
Green Growth Brands announced this week that it had secured 10 days of protection from its creditors — a period that may be extended. The company’s stock, which is publicly traded on the Canadian exchange, tumbled on the announcement.
“The pandemic has forced the Company to indefinitely suspend its cannabidiol business, ultimately resulting in the appointment of a receiver for that business,” the company said in a press release, “and to restrict operations at the Company’s The+Source dispensaries in the Las Vegas, Nevada region as a result of Nevada Governor Stephen Sisolak’s March 20, 2020 order limiting dispensary operations in the state.”
The+Source had been one of the biggest success stories in Nevada’s cannabis industry, opening locations in Las Vegas and Henderson and landing highly coveted licenses in late 2018 for seven additional dispensaries, including one for a Reno dispensary that it was preparing to open. It was helmed by former Nevada Dispensary Association Andrew Jolley and later acquired by Ohio-based Green Growth Brands.
But Green Growth Brands had been going through financial troubles even before the pandemic, racking up losses and cutting jobs in February.
Company officials said Nevada’s stringent restrictions on marijuana businesses — Sisolak ordered them to move to delivery-only models and only recently opened to curbside pickup and then in-store sales — was a hard hit.
“Our operations have been severely impacted by COVID-19 and we are continuing to work diligently to ensure that our shelves remain stocked with our in-house and third-party vendor products,” said Brandon Wiegand, director of operations at The+Source.
He said the company’s implementation of online ordering and an in-house delivery service has increased efficiency.
“Through this uncertain time in the state of Nevada, we’re working together as an industry to bring education, safe products and accessibility to our communities,” he said.
A study commissioned by the Nevada Dispensary Association and released this week found that Nevada marijuana businesses made $692 million in taxable sales in the last fiscal year and support about 8,200 direct jobs, plus another 2,000 in ancillary jobs. Although the Nevada Department of Taxation reported marijuana yielded about $8 million in taxes and fees in February, it hasn’t yet released statistics from March that would illustrate how much the shutdown orders affected sales
People in the industry have told The Nevada Independent that many marijuana businesses struggled to transition to delivery-only formats and saw big drops in sales volume through the course of the ongoing restrictions.