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.