The filing will allow the industrial hemp giant to continue to operate its business without interruption to customers, vendors, partners and employees while working through a reorganization plan that could include refinancing of the Company’s existing indebtedness, or an alternative restructuring transaction such as a sale.
“We are taking this action in order to position our business for success in a highly dynamic and rapidly evolving industry,” said Matty Mangone Miranda, Chief Executive Officer of GenCanna Global. “While this is certainly not the outcome we desired, the bankruptcy process gives us the ability to move forward in a way that allows us to best continue operations and serve customers as we work through our reorganization, resolve an outstanding legal dispute involving our Western Kentucky facility, navigate an uncertain regulatory environment and adjust our annual operating costs to better match the landscape.”
GenCanna has obtained approximately $10 million in post-petition debtor-in-possession (DIP) financing from its senior lender, which, subject to Court approval, will provide the Company with liquidity to maintain its operations in the ordinary course of business during the Chapter 11 process.
“Through this restructuring, we plan to address certain structural issues that we could not fix on our own,” Miranda said. “We are grateful for the continued support of our existing senior lender, who recognizes the strength of our brand, and we will continue to work tirelessly on behalf of our employees, farmers, and vendor partners.”
U.S. Rep. James Comer told the Louisville Courier-Journal that he's “very disappointed in how GenCanna has left so many contractors from my district high and dry, when they just walked away from them in Mayfield.”
Last year, there were multiple delays in the construction of GenCanna’s Mayfield processing facility. Building contractors have filed multiple liens on the property, saying GenCanna owes them more than $13 million. Then, farmers in GenCanna’s network of contract producers started suing the company over what the farmers call inferior seed and broken promises.
GenCanna began in 2014 after the state of Kentucky legalized hemp. The plant is non-psychoactive cannabis that's used for medicinal CBD oil, fiber for clothing and seed as a nutritional supplement.
