Yo, what’s good? It’s your boy Dan, and I’m here to talk to y’all about Chalice, Oregon’s top cannabis company, and the financial crisis they’re currently dealing with. According to Willamette Week, Chalice is in some deep sh*t with over $35 million in debt. To make matters worse, they’ve had to ask the Multnomah County court to take control of five of their subsidiary companies. Chalice runs fifteen dispensaries across the state, so you know this is a major problem.
The smaller cannabis businesses have been calling out Chalice for not paying their dues, but Chalice says that their wholesale partners owe them a lot of money too. They’re blaming the oversupply of weed on the market and the fact that federal deregulation is taking way too long. Landlords are even threatening to take away Chalice’s properties due to unpaid rent. The parent company of Chalice Brands in Toronto is now looking for someone to buy all their assets.
So what’s Chalice’s move? They’re trying to avoid getting sued by creditors by asking for protection from a Canadian court to reorganize their assets. Most of the money they’ve borrowed is owed to institutional lenders in Canada and the U.S.
Now, this situation is pretty wild because it’s a vertically integrated cannabis company within Oregon suing themselves. Crazy, right? The CEO of Chalice wants everyone to know that this lawsuit isn’t supposed to be confrontational or anything – they just need a receiver for their assets. Even though Chalice is based in Canada, all their assets are in America.
Things have gotten so bad that trading of Chalice’s stock in Canada has been suspended since May 2022 because they haven’t filed any financial reports for 2021 or 2022. Damn.
Chalice is hoping that this receivership process will buy them some time so they can figure out what to do next. They might sell the company, or they could look for investors to help them out of this mess.
If you’re wondering what receivership is, it means that a court-appointed receiver gets put in charge of a company’s assets and operations. The goal is to protect the creditors’ interests, and the receiver has control over areas like resources, finances, and employees. They have experience managing distressed companies and are required to give regular reports to the court on what’s happening with Chalice’s finances. The receiver’s job is to steer the company back on track while making sure everyone gets paid.
So why did Chalice get into this situation? A lot of things happened all at once. They were struggling with their finances, losing money left and right, and couldn’t pay their debts. Plus, competition in the cannabis industry in Oregon is crazy high (haha). Prices are low, so it’s hard to make a profit when everyone and their grandma is selling weed. And then there’s the complicated regulatory stuff they have to deal with – it takes forever to get licensed and make sure you’re following all the rules. Not being compliant can get you penalized big time, and that’s exactly what happened to Chalice.
By going into receivership, Chalice hopes they can get back on their feet and start making some money again. But it won’t be easy. The receiver might cut costs by laying off employees or renegotiating supplier contracts. These changes could also impact customers who might not be able to find their favorite products anymore.
So that’s what’s going down with Chalice. It’s a tough situation, but they’re trying to figure it out. This whole thing shows how tough it is to run a cannabis business these days – you gotta know how to navigate all the rules and regulations while still trying to turn a profit. It ain’t easy.