Hemp Producer GenCanna Files For Bankruptcy Amid Lawsuits, Liens, And Foreclosure Filings

Kentucky hemp producer GenCanna Global has filed for Chapter 11 bankruptcy protection and will reorganize its operations through the filing. The company said it will continue to operate without any interruption to its customers, vendors, partners, or employees.

As part of the reorganization process, GenCanna is looking into refinancing its existing debt or find an alternative restructuring option that could include a sale of the company. GenCanna has secured about $10 million in post-petition debtor-in-possession financing it said was from a senior lender.

GenCanna said the DIP financing will offer the company liquidity to continue its operations during the Chapter 11 process. As part of the restructuring process, GenCanna will address its structural issues that Matty Mangone Miranda, CEO at GenCanna, said it “could not fix on our own.

“We are taking this action in order to position our business for success in a highly dynamic and rapidly evolving industry,” Miranda said in a statement.

“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,” he added.

The news of the bankruptcy filing comes as GenCanna’s creditors petitioned the court to force the hemp producer into Chapter 11 to receive payments of their debts, WPSD, an NBC affiliate out of Paducah, Kentucky, reported.

In addition, a number of liens have been placed against the company’s Kentucky factory by contractors that said GenCanna has not paid for the work completed on the property, along with one contractor that filed a foreclosure complaint, the news outlet said.

GenCanna has also reportedly been sued by a series of Kentucky farmers that claim the company has sent them low-quality hemp seeds in addition to violating contracts between the two parties. The company also laid off 60 workers in December from its headquarters location, according to WPSD.

GenCanna has hired Huron Consulting Services LLC as its operational advisor and Jefferies LLC as its financial advisor. Benesch Friedlander Coplan & Aronoff LLP and Dentons Bingham Greenebaum LLP are serving as the company’s legal counsel.