According to a recent press release, U.S.-based cannabis business Green Growth Brands Inc. announced that it plans to sell its CBD business. A day after the announcement, the company’s shares decreased by over 30% this week.
The BRN Group Inc. is the company that will acquire a majority stake of Green Growth Brands. At the end of the transaction, Green Growth Brands will still retain a 20% interest in the business. The company currently has CBD stores in Florida, Nevada, and Massachusetts.
Nonetheless, GGB CEO Peter Horvath reported that the sale of the business is due to liquidity challenges and increased costs that have posed as a bar to it reaching its full potential. Specifically, he stated in the press release,
“With high-potential in the future comes material overhead costs and other obligations in the near term. These near-term overhead costs and other obligations, together with constraints on liquidity, have posed significant challenges that have hindered us from growing the CBD Business to its full-potential.”
Despite doing $6.4 million in profit for the quarter, where 2018 was just at $144,000, the future remains uncertain for the Ohio-based cannabis retailer. Mr Horvath went on to add:
“While we are excited by the consumer demand signals we saw in the CBD Business during the quarter ending December 28, 2019, and we remain confident in its future potential, the CBD Business remains in its nascency”
We will continue to follow up with this story as more updates are made available.