Green Dragon Shuts Down: Layoffs, Lawsuits And Financial Woes

Colorado-based marijuana operator Green Dragon has announced plans to cease operations by the end of 2024, closing all of its facilities in Colorado and Florida. The company notified the Colorado Department of Labor and Employment that it would lay off all 59 employees at its 92,000-square-foot Denver cultivation site and shutter all 17 of its retail locations in the state, as confirmed by Cory Azzalino, CEO of Green Dragon's parent company, Eaze.

As MJBiz Daily reported, this shutdown extends beyond Colorado. Green Dragon is also planning to close a substantial 400,000-square-foot medical marijuana cultivation facility and 39 dispensaries across Florida. These closures come amid a series of financial challenges and shifting ownership that have impacted the company's operations.

Ownership Shifts And Financial Struggles

Green Dragon, along with Eaze, a California-based cannabis delivery service that acquired Green Dragon nearly three years ago, was recently acquired by a holding company led by billionaire Jim Clark, founder of Netscape. Clark foreclosed on Eaze in May after the company defaulted on a $36.9 million loan issued in 2022, leading FoundersJT, Clark's holding company, to acquire Eaze's assets at auction for $56 million in August.

In the wake of these financial moves, Green Dragon's former owners, Lisa Leder, Andrew Levine and Alex Levine, filed a lawsuit in 2023, alleging that Eaze was "close to insolvency" and had misled investors. Though the case was dismissed later that year, Andrew Levine refiled a lawsuit on August 6, 2024, this time questioning whether Clark and board member Thomas Jermoluk had intentionally undervalued the company's assets for acquisition.

Eaze will also cease operations on December 31, 2024, following the foreclosure of its assets.

Union Conflicts And Workplace Safety Concerns

Green Dragon's troubles have extended to labor relations as well. In 2022, the United Food and Commercial Workers Local 7 union led a picket line of former Green Dragon cultivation workers outside its Denver facility. Workers cited unsafe conditions and health risks, particularly mold issues, at the facility, alongside complaints of low wages.

Industry Implications

The decision to shut down Green Dragon's operations marks a significant shift for one of Colorado's established cannabis brands. With the closures, Green Dragon joins a growing list of cannabis companies struggling amid intense competition, financial instability and regulatory pressures. The outcomes of these ongoing lawsuits and the company's eventual dissolution may serve as cautionary examples for the evolving cannabis market as it grapples with issues of consolidation, labor relations, and financial sustainability.

Cover image made with AI