A once-promising titan in the young American CBD trade has entered into receivership amid falling revenues, sources report.
The company made news early last year for spreading its cannabis products into stores like Abercrombie & Fitch and other retailers all across the U.S.
Firms like Green Growth have been integral to alerting normal people about the power of CBD to make positive impacts on daily life.
The company will likely be sold off amid the drastic reduction in sales in 2020. The novel coronavirus pandemic and subsequent economic shutdowns played a role because many of the brand’s most lucrative point-of-sale locations were in mall stores and kiosks, according to Green Market Report.
According to Yahoo! Finance, Green Growth Brands lost $35 million in the last months of 2019 and will likely maintain around 20% ownership interest in its CBD company after the new move has been made. [1] It’s CBD company was bringing in $11 million, Yahoo! reports.
Drastic layoffs were part of the move, the Green Market Report said, but funding for the most recent payroll has been secured.
"With high-potential in the future comes material overhead costs and other obligations in the near term,” Green Growth CEO Peter Horvath told Yahoo! Finance in a press release. “In light of these factors, we have determined it necessary and appropriate to sell the CBD business and focus on executing our MSO business plan.” [1]
The company recently cancelled an investor update call in the wake of the big announcement, Yahoo! claims.
As the CBD side of Green Growth comes out of this transition period and possibly allows the parent company to avoid bankruptcy, there will be major day-to-day operational changes, Green Market Report says. [2]
“[T]here remains a significant risk that the company will be unable to realize sufficient cost savings, find sufficient sources of financing for on-going working capital requirements and maturing debt and other liabilities or to negotiate extensions or alternate payment terms in respect of such debt,” Green Growth said in a statement, according to Green Market Report. [2]
Green Growth’s local-level subsidiaries will continue operations and move as many sales via delivery and other quarantine-friendly methods as time goes forward.
These subsidiaries are largely based in Nevada and are not a part of the new receivership order, the Green Market Report said. [2]
Sources
[1] https://finance.yahoo.com/news/green-growth-cbd-sean-combs-012143467.html
[2] https://www.greenmarketreport.com/green-growths-cbd-business-goes-into-receivership/
