One of California’s oldest cannabis companies has filed for bankruptcy in Canada after initiating receivership proceedings in its home country.
StateHouse Holdings Inc (OTCMKTS: STHZF) has halted trading on the Canadian Securities Exchange before an impending suspension and eventual delisting. The company has a California cultivation facility in Salinas, a manufacturing operation in Greenfield, 11 dispensaries and multiple brands.
The cannabis operator’s financial troubles became publicly known in September when one of its primary lenders filed a complaint in the San Diego Superior Court. Pelorus Fund REIT, LLC requested that StateHouse be placed in receivership due to a failure to meet its financial obligations. The Golden State marijuana operator has defaulted on four loans.
“As we have stated since we initiated these proceedings, we recognize the significant value of StateHouse’s business, employees and operations, and look forward to continuing to work with the company and the court-appointed receiver to ensure it is well positioned with a cleaner, more efficient and appropriate structure moving forward,” Pelorus said in a news release.
StateHouse was previously known as Harborside Inc. before a rebranding in mid-2022. Harborside was awarded one of the state’s first medical pot licenses in 2006. StateHouse has now joined the ranks of failed California cannabis companies like MedMen and Eaze.
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Founders are heartbroken
Harborside’s founders, Andrew and Steve DeAngelo, are quite upset about the recent developments.
“Harborside was our baby,” Steve told the Green Market Report this week. “It was something that we loved and something that we nurtured and something that we saw destroyed.”
He says there is nothing that would make him and his brother happier than to revive the company. They headed Harborside from its inception in 2006 until the year after it went public in 2020. The brothers were then forced out by what has been described as an aggressive takeover by other investors.
“An investor group headed up by Matt Hawkins [Entourage Capital] and Roger Jenkins, unhappy with the incremental pace of growth, engineered a hostile takeover,” Andrew explained last week.
“For us, this takeover was the beginning of the end,” Andrew added in a LinkedIn post Thursday. “Those investors clearly made the wrong calls or the company would not be in receivership.”
Now, the two of them refuse to rule out the idea of returning to the company and restoring it to its former glory. They’re considering a buy-back, but nothing is certain at the moment.
Andrew is one of the founders of the California Cannabis Industry Association. He currently works as an advisor for the marijuana and psychedelics industries.
In 2019, he and his brother founded The Last Prisoner Project — a non-profit aimed at combatting the harmful impact of the War on Drugs.
rowan@mugglehead.com
