Oregon’s cannabis giant, Chalice, is facing a severe financial crisis. With debts of over $35 million, the company has asked a Multnomah County court to place five of its subsidiary companies under the control of a receiver, reports the Willamette Week.
Chalice currently has 15 dispensaries in the state.
This recent court action highlights the dire situation for Oregon’s third-largest dispensary chain. Small cannabis businesses have accused Chalice of non-payment, while Chalice claims to be owed a significant amount by their wholesale partners.
Chalice blames an oversupply of cannabis, and “a lack of Federal deregulation that had been expected by many” for its cash problems, says Oregon Live.
The situation has led to landlords threatening to seize Chalice’s dispensary properties due to unpaid rent. Chalice Brands, the parent company based in Toronto, is actively seeking a buyer for all its assets.
Chalice has also requested protection from a Canadian court to reorganize their assets and avoid legal action from creditors. Most of the borrowed funds are owed to institutional lenders in Canada and the U.S.
The court filing is unique, says the report, because the plaintiff and defendants are all part of the same vertically integrated cannabis company, operating in Oregon. Chalice’s CEO emphasizes that the lawsuit is not adversarial but necessary to secure a receiver for their assets. Despite being a Canadian company, all of Chalice’s assets are located in the United States.
Trading of Chalice’s stock in Canada has been suspended since May 2022 due to their failure to file financial reports for 2021 and 2022.
Chalice hopes that the receivership will provide them with time to explore options such as selling the company or seeking investments.