Green Growth Brands Inc. (CSE: GGB) (OTCQB: GGBXF) has placed the company’s CBD business into receivership. This is typically a move to avoid bankruptcy. This was the determination from the company’s special committee of the Board of Directors.
Just a few weeks ago, Green Growth Brands closed down its CBD business, which was operating as the chain of Seventh Sense stores or kiosks. The company stated at that time that the stoppage in business was due to COVID19 and the closing of malls and retail areas. However, the company was struggling prior to the virus crisis.
The consent to the appointment of the receiver was filed on April 2, 2020, with the Franklin County Court of Common Pleas, in Franklin County, Ohio. Materials related to the filing can be accessed via the Franklin County Clerk of Courts electronic docket, which can be found at https://fcdcfcjs.co.franklin.oh.us/CaseInformationOnline/.
Technically, the CBD Business is operated by six of the company’s subsidiaries: Green Growth Brands LLC, GGB Beauty LLC, GGB Licenses LLC, Green Growth Brands Realty LLC, GGB Kiosks LLC, and GGB GN LLC (collectively, the “CBD Subsidiaries”). Each of the CBD Subsidiaries will be subject to the receivership order.
Green Growth said that aside from the CBD situation, “there 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 is trying to negotiate its obligations and has drawn down all the money available to it through All J’s Greenspace and Chiron Ventures.
All Js advanced approximately $1.5 million from its portion of the previously announced $52.3 million debenture repayment backstop commitment. The company said it is actively pursuing alternative financing sources but there can be no guarantee that any such financing will be consummated or if consummated on what terms.
Green Growth said it will continue to operate its cannabis business in Florida, Massachusetts, and Nevada through its subsidiaries Nevada Organic Remedies LLC, Henderson Organic Remedies LLC, Wellness Orchards of Nevada LLC, Just Healthy LLC, and Spring Oaks Greenhouses Inc. NOR and Henderson operates the The+Source dispensaries in the Las Vegas, Nevada region, and have recently started a delivery service in response to Nevada Governor Stephen Sisolak’s March 20, 2020 order limiting dispensary operations in the state. None of the MSO subsidiaries nor any of their respective assets will be subject to the receivership order.
In exclusive reporting by the Green Market Report, Green Growth attempted to lay off its workers without giving them back pay. Once the story was uncovered, the company was able to secure the money. On Friday, March 20, 2020, Green Growth Brands informed its laid-off workers that they would get paid. A spokesman for the company said, “At the time of the decision, the company remained uncertain of its ability to fund the payroll for the period ending today, March 20, 2020. As of this writing, I can confirm that such funding has been secured, that payroll has been initiated, and that all associates released will be paid for their time worked.”
The spokesman also confirmed that Horvath resigned voluntarily and would receive no severance pay. According to the company’s Management Information Circular, “If Mr. Horvath had been terminated by the Company without cause or had resigned from the Company for good reason as of June 30, 2019, Mr. Horvath would have been entitled to a payment of $2,550,000.”
August 26, 2021 at 7:34 pm
i never received the compensation i was due/owed for the final week of work completed before being laid off due to the pandemic. i only received up to a certain date, though i worked open to close in my assigned kiosk almost a full week before the lay off, none of which was included in my final check/pay out. i loved working there but there lack of transparency and payment at the end really hurt and darkened my heart ngl.
August 26, 2021 at 7:35 pm
the** lack of transparency. not there** lack.
October 16, 2021 at 3:50 pm
Yeah…I was a store manager
When we were told we would be laid off, effective immediately, without pay the following Friday (this was Thursday the 19th, the final day that the stores which were still opened amidst the pandemic were finally shuttered, many had closed until further notice along with their respective malls, including my store, that prior Tuesday, March 17th) all of us GM’s either went out ourselves and cleaned our stores out, or had one of our employees do it. We weren’t leaving without some form of payment and we did not know whether pay would or would not arrive that Friday, so we took action to make sure that in some way we were paid. The following morning when we got paid, some* of us felt bad that we had cleaned the stores out but it was already done at that point, so we weren’t taking everything back. Nonetheless, we never heard a word about the merchandise/electronic equipment/fixtures that we removed (not one of us) so we all just left it at that. We had nearly 300 locations (296 to be exact) and to make it worse, the 296th store had only been open for about two weeks before we folded. They had to of known we were going under and they still decided to push forward with that one last store opening. By August of 2020 (around 5 months after the locations sat abandoned, most of them either looted by the employees, or the other mall staff/customers) a company named American Signature acquired all assets related to Seventh Sense for 50 stores, the other 246 locations were ultimately disassembled or the signs were removed and/or the kiosks re-leased by the malls in which leases were defaulted on to recover funds. Those 50 stores did re-open with new staff (and some people for whatever reason who did return from the original period of business, undoubtedly for less than we made initially) and the new owners were able to secure manufacturing for their Seventh Sense edibles and topical care products, so that being said, in about a 25% shadow of what we originally were, they are again operating. How well they are doing? I would not imagine any better/worse than it was the initial go-round, just surely with less overall loss now because less locations are operating.