One of the largest hemp processing companies in Kentucky is filing for Chapter 11 bankruptcy.
GenCanna’s filing Thursday in the U.S. Bankruptcy Court in the Eastern District of Kentucky, if granted, would allow the company to operate while seeking options including refinancing or finding an entity to buy the company.
GenCanna launched in Winchester, Kentucky, in 2014 when the state legalized the cultivation of hemp under a pilot program. GenCanna processes hemp into products made from CBD, a compound many users claim has medicinal benefits. The company in past years had invested heavily in marketing throughout the state, buying billboard space in west Kentucky and becoming last year’s title sponsor for the Kentucky State Fair.
Company CEO Matty Mangone Miranda in a statement said the bankruptcy process will allow GenCanna to navigate several ongoing issues that include an uncertain regulatory environment surrounding hemp and CBD and a “legal dispute” in west Kentucky.
“Through this restructuring, we plan to address certain structural issues that we could not fix on our own,” Miranda said. “We are grateful for the continued support of our existing senior lender, who recognizes the strength of our brand, and we will continue to work tirelessly on behalf of our employees, farmers, and vendor partners.”
GenCanna is also asking a bankruptcy judge to allow the company to take a $10 million loan to maintain operations through the bankruptcy process.
Construction companies in west Kentucky and other states have filed dozens of liens against GenCanna in Graves County Court, totaling more than $32 million combined as of December, for unpaid construction work at an unfinished hemp processing facility in Mayfield. The company had originally announced in 2018 it was investing $40 million to build the Mayfield facility.
Pinnacle, Inc., based in Benton, Kentucky, had filed a petition in late January to force GenCanna into Chapter 11 bankruptcy. GenCanna on Thursday consented to that petition, along with filing a voluntary bankruptcy petition of their own. GenCanna has faced lawsuits from farmers in the past, alleging the company failed to meet their promises in paying drying equipment.
This story will be updated as necessary.