Gold Flora, once considered a heavyweight in California’s legal weed game, is the latest to fall into receivership—a court process that allows cannabis businesses to sell off their assets since federal law bars them from filing bankruptcy.
And they’re not alone. The state’s cannabis scene is starting to look like a graveyard, with once-thriving shops like Freeway Rickys, Free The Trappers(Herbarium), Goat Global (South LA), and LitCo shutting down or going dark.
Another One Bites the Dust
Gold Flora made headlines last week after confirming it would move to sell its assets through court-appointed receivership. The company operates 16 dispensaries across California—including heavy-hitters like Airfield Supply Co. in San Jose and Calma in West Hollywood—and even owns a 10,000-square-foot cultivation campus.
Despite generating more than $100 million in revenue annually, the Costa Mesa-based operator says it’s drowning under legal fees and operational costs tied to its 2023 merger with TPCO.
No Bankruptcy Protection for Bud
Unlike other industries, cannabis businesses can’t seek shelter under federal bankruptcy laws due to marijuana’s classification as a Schedule I drug. That leaves receivership—essentially a forced asset sale supervised by the courts—as the only real option.
“This was a difficult but correct decision to make for all stakeholders,” said founder and CEO Laurie Holcomb. “We believe Gold Flora’s business remains valuable and sound, but receivership is our only option to sell the business as a going concern.”
Translation? They’re not throwing in the towel—but they’re definitely out of the ring.
The Receivership Trend Grows
Gold Flora isn’t the first—or last. Earlier this year, StateHouse Holdings, another big cannabis player in the state, also entered receivership. That followed a brutal wave of closures from local faves and community-rooted dispensaries that couldn’t weather the economic storm.
A Perfect Storm for Struggle
California’s weed industry was supposed to be the promised land. But between impossible tax codes, lack of federal banking, and oversaturation, it’s turning into a cautionary tale.
Under IRS code 280E, cannabis companies can’t deduct most regular business expenses. That makes even profitable businesses look broke on paper. Add in the cash-only nature of most weed transactions (since banks won’t touch cannabis money), and you’ve got a setup that’s just not sustainable.
Gold Flora reported a $18.8 million loss in Q3 2024 alone, despite pulling in nearly $33 million in revenue. Assets totaled $209.7 million, but liabilities hit $273.1 million. That math don’t math.
What’s Next?
With cannabis still federally illegal, the entire industry is locked in a strange legal limbo—growing fast, but always under pressure. For Gold Flora and others like it, selling under receivership might be the only way to recoup and restructure. But for legacy operators, equity license holders, and community-backed brands, it often means game over.
As more names fall, one thing becomes clear: This market wasn’t built to protect the little guy. And until there’s real federal reform and state-level tax relief, the exits will keep outpacing the entries.
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