Another one of California’s largest cannabis operators plans to liquidate assets after mounting financial losses and operational challenges.
Gold Flora Corp., one of the state’s largest cannabis retail chains, is entering receivership after defaulting on a $11.5 million loan.
The company said in a press release its seeking court protection as a result of lawsuits related to its 2023 acquisition of TPCO Holdings, rising business expenses and high-yield debt.
The deal for TPCO, which operated as The Parent Co., was positioned to streamline operations while generating annual savings of $20 million to $25 million, Gold Flora said at the time. The deal also had high visibility because of The Parent Co’s affiliation with rap mogul “Jay-Z” Carter.
Gold Flora’s receivership filing followed a default notice from J.J. Astor & Co. related to a senior secured promissory notes issued between August 2024 and December 2024.
The default increased the notes’ outstanding principal and interest to approximately $11.5 million.
“This was a difficult but correct decision to make for all stakeholders,” CEO and founder Laurie Holcomb said in a releases statement.
“While Gold Flora remains a leading operator and retailer in the cannabis market in California with over $100 million in annual revenues, the liabilities on our balance sheet, many of which are due to lawsuits we inherited with the TPCO business combination, forced us to file for a voluntary receivership that is necessary to achieve an orderly sale of the business.”
Gold Flora did not immediately respond to attempts to reach it.
The company said it expects to be placed into receivership in the Los Angeles Superior Court, Santa Moncia Division and Richard Ormond of Stone Capital Blossom, LLC, to be appointed as receiver.
Ormond, a Los Angeles-based attorney with expertise in finance, banking and cannabis regulations, briefly served as chief restructuring officer for MedMen after a management shakeup and the multistate operator entered bankruptcy proceedings in Canada about a year ago.
Gold Flora said it will continue operating as a going concern amid the asset sale, which includes 16 dispensaries, three cultivation facilities in Desert Hot Springs and two in San Jose totaling 107,000 square feet.
Its retail brands include:
- Airfield Supply Co.
- Caliva.
- Coastal.
- Calma.
- King’s Crew.
- Varda.
- Deli.
- Higher Level.
The vertically-integrated company, based in Costa Mesa, also operates a manufacturing and extraction business in Desert Hot Springs, as well as a distribution arm under Stately Distribution.
As a result of the receivership filing, Gold Flora expects its common stock and warrants will be suspended from trading on the Cboe Canada exchange and will ultimately be delisted from Cboe Canada, where it had a $14 million market cap Monday.
Frank A. Segall of Blank Rome LLP is serving as the Costa Mesa-based company’s legal counsel during proceedings.
MJBizDaily in November reported financial recovery firm Global Assets Liens & Foreclosure filed an ex parte application for receivership in Santa Barbara Superior Court against Gold Flora, which owed more than $236,725 in unpaid invoices and incurred losses exceeding $37 million at the time.
Gold Flora’s demise follows the collapse of several of California’s largest cannabis companies, including Herbl, MedMen, High Times and StateHouse Holdings.
In receiverships, secured creditors such as banks and those with asset-based collateral are paid first, while unsecured creditors often go unpaid.
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