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Green Roads is bankrupt less than two years after its acquisition by The Valens Co., a Canadian cannabis manufacturer.
The Deerfield Beach-based company filed for Chapter 11 bankruptcy reorganization March 6 in U.S. District Court for the Southern District of Florida. Founded in 2013, Green Roads manufactures and sells cannabidiol (CBD), a non-psychoactive compound found in hemp and cannabis.
The firm has $6.05 million in assets on hand and $5.6 million in unsecured liabilities to creditors, court documents said. The liabilities include more than $783,000 owed on its lease at 601 Fairway Drive, where Green Roads' headquarters is located. Other large creditors include smart retail company Signifi Solutions ($813,800), IHeartMedia ($478,000) and American Express ($371,444).
Increased competition in the CBD industry, higher supply chain costs and the closure of independent retailers during the Covid-19 pandemic all contributed to Green Roads' financial losses, according a declaration from CEO Julie Pilch.
"The debtor’s financial performance has not lived up to what was expected at the time of the transaction with Valens," the document said. "Some of this can be rectified through operational changes, including reductions in force."
Green Roads has 66 employees on its payroll.
The Valens Co. purchased Green Roads for $40 million in 2021 in a bid to grow its U.S. marketshare. At the time, former Valens CEO Tyler Robson said buying the company was a "monumental" step in the firm's plan to become a global manufacturer of cannabis consumer packaged goods.
In January, The Valens Co. was acquired by SNDL, a Canada-based liquor and cannabis retailer. SNDL did not respond to a request for comment.
Proponents say CBD can be used to treat health conditions such as anxiety, chronic pain and insomnia. There are no U.S. Food and Drug Administration-approved drugs containing CBD on the market aside from Epidiolex, a prescription medicine used to help prevent rare seizure disorders.
Large CBD companies like Green Roads lost market share in 2022 due to increased competition and a decline in e-commerce sales, according to a report from cannabis industry analytics firm Brightfield Group.
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