Green Growth Says It Will Pay Former Staffers After Layoffs, CEO Departure, Retail Closures

Cannabis company Green Growth Brands GGBXF is in the midst of a shakeup.

The Toronto-based company said Friday that its CEO Peter Horvath resigned from his positions as CEO and a board member. 

Green Growth also announced a round of layoffs. In doing so, the company was scrutinized over whether enough funding was in place to secure payroll.

Austin Grishaber, one of Green Growth’s employees working as a lead guide, told Green Market Report that the company informed its Seventh Sense CBD kiosk employees that it can’t compensate their back pay. 

“Yesterday we got a message from them stating that we are all basically fired and said ‘Unfortunately, we’re not in the position to fund payroll, your termination date is official as of March 19, 2020.’ they blindsided us," he said. "They had the district guides and lead guides blinded so we wouldn’t leave the company early."

A Green Growth spokesman later confirmed that the company did pay all employees for the time they worked, according to Green Market Report. 

Former Staffer Says They're 'Stranded'

Still, many former and current employees left critical comments on the website GlassDoor complaining of late payments.

“Long shifts by yourself. No product to sell. $100 minimum sales a day or you get written up. You aren’t allowed to sit or take breaks your entire shift. The company has run out of money and can’t pay employees leaving most of us stranded with late bills and overdraft fees,” one comment read, per Green Market Report.

Furthermore, Green Growth Brands said it has temporarily closed all of its mall locations and suspended its CBD e-commerce platform.

CFO Touts Performance

This came just a few weeks after Green Growth Brands’ CFO praised the performance of its CBD business segment during the company’s earnings conference call

“In addition, CBD e-commerce revenue more than tripled going from 5% of retail sales last quarter to 8% this quarter while CBD wholesale revenue increased slightly from 2.1 million to 2.3 million. CBD growth margin was 40% up from 11% in the prior quarter resulting in gross profit of $4.4 million,” CFO Brian Logan said.

While paychecks were running late for the company’s hourly employees, Green Growth Brands managed to allocate around $5.37 million for head office salaries in the most recent quarter, according to Green Market Report.

Green Growth Says Payroll Underway For Laid-Off Staff

According to Monday's update to Green Market Report’s story, Green Growth Brands has notified its fired staff that they will be paid.

“At the time of the decision, the company remained uncertain of its ability to fund the payroll for the period ending today, March 20, 2020. As of this writing, I can confirm that such funding has been secured, that payroll has been initiated, and that all associates released will be paid for their time worked,” a spokesman of the company said.

The stock was down 33.06% at 4 cents at the time of publication. 

Photo courtesy of Green Growth Brands.