GenCanna Global USA Inc., a large Kentucky producer of cannabidiol, or CBD, oil and other hemp products, has filed for bankruptcy following cost overruns and construction delays at a new processing center and a fire last year at its existing facility, WSJ Pro Bankruptcy reported. Aside from facing operational problems, GenCanna said yesterday in papers filed in the U.S. Bankruptcy Court in Lexington, Ky., that it has been hurt by a “dramatic plunge” in the price of CBD products that began last summer. That drop has stressed its ability to raise new capital and pay suppliers. Yesterday’s bankruptcy filing comes weeks after three creditors sought to force GenCanna into chapter 11. GenCanna said in response the company had sought assistance “to find an out-of-court solution” and had been attempting to address the dispute with at least one of the creditors, Pinnacle Inc., in arbitration. GenCanna said that it needs a breathing spell in chapter 11 to evaluate its possible options, which include a potential restructuring or sale of the company. It also said the business needs to address a legal dispute involving its facility in western Kentucky. Its existing lender, MGG Investment Group LP, has agreed to provide $10 million in chapter 11 financing to keep funding the company’s operations.
