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January 17, 2023

CT cannabis grower marketing itself for sale

HBJ PHOTO | Brad Kane & Matt Volpini Signage outside Theraplant's location in Watertown.
By Skyler Frazer

Just a day before Connecticut’s adult-use recreational marijuana market launched, the parent company of one of the state’s four cultivators indicated it was continuing to market itself for a potential sale.

Greenrose Holding Co., the multistate cannabis operator based in New York that owns hybrid grower Theraplant, submitted a filing with the U.S. Securities and Exchange Commission (SEC) on Jan. 9, indicating that it has agreed with its lenders to extend the marketing period through Jan. 30.

The company first entered into an agreement with its lenders on Nov. 10, to essentially sell off parts, or all, of the business to pay back the financial institutions that loaned them money.

Greenrose agreed to market itself and its assets “with the goal of receiving binding transaction proposals for, including but not limited to, a sale, disposition, reorganization, merger, financing or other type of transaction that, among other conditions, satisfies the payment obligations owed by the Greenrose Entities.”

If the company hasn’t found a transaction proposal by the deadline, which has now been extended through Jan. 30, “the Consenting Lenders and Agent will effectuate a foreclosure through the formation of a newly-formed company that will transmit an offer, in the form of a foreclosure agreement, to the Greenrose Entities to accept the Agent’s collateral.”

Greenrose bought Theraplant, one of the state’s four medical growers with a facility in Watertown, in March 2021. The company also owns a marijuana grow operation in Arizona named True Harvest Holdings.

Last year was a rocky one financially for the company. Greenrose said in its third-quarter filing with the SEC that, as of Sept. 30, it didn’t have enough working capital to satisfy its liabilities.

“As a result, after taking into account the company’s cash flow projections, we do not believe the Company will have sufficient cash on hand or available liquidity to meet its obligations in the upcoming reporting periods, and we have substantial doubt regarding our ability to continue as a going concern,” the company wrote in its earnings report.

Those concerns include potentially shutting the business down, Greenrose went on to say.

The state recorded more than $250,000 in adult-use cannabis sales on the first day of legalization Jan. 10.

State officials said in December that, even if one of the four existing cannabis producers were to go out of business and drop the state’s total growing and manufacturing capacity below the 250,000-square-foot minimum requirement, the recreational market would remain open.

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