New Zealand cannabis firm MedGreen Pharmaceutical has been put up for sale after running out of cash and going into voluntary administration, Cannabiz has learned.
Insolvency specialist Khov Jones said the Rotorua-based firm hit cashflow problems and had “no choice” but to call in administrators.
A buyer is now being sought for the business.
It is understood the company has a German export agreement in place and a two-acre plot with greenhouses on site.
The plight of MedGreen, one of New Zealand’s oldest medicinal cannabis companies having formed in 2016, was revealed last week by Cannabiz.
Administrator Steven Khov said the initial plan is to sell the company as a whole.
“The business encountered cashflow constraints which left it with no choice but to enter into a formal insolvency process,” he said in an emailed response to questions. “We are currently seeking interested parties to acquire the business in its entirety in the first instance. Failing that we will look to sell the assets of the business in components.”
MedGreen was continuing to trade “for the time being”, Khov said.
The administrator added that MedGreen was generating little revenue, but has a “signed contract to supply”.
It is unclear how much debt the company is in as creditors are continuing to file claims, Khov said.
Documents lodged with New Zealand’s Companies Register show Robin Lewis as the only remaining director of MedGreen following the departure of Hilary Quenby and Brock Lauritsen in July. According to records, Lewis owns 45% of MedGreen.
On LinkedIn, MedGreen is described as “one of the largest growers and exporters of New Zealand medical cannabis flower… as we continue to set up our Bay of Plenty operations with a world-leading team, infrastructure and procedures.
“By way of example, we recently invested in the installation of the very latest climate control technologies, enabling us to closely manage growing conditions and deliver a consistently high-quality product to our distribution partners from every harvest,” it said.
New Zealand Medicinal Cannabis Council executive director Sally King described the company as “courageous”.
“They started the journey long before anyone could be certain where New Zealand’s law on medicinal cannabis would land,” she said. “It is so disappointing when the industry is on the cusp of strong growth.”