Struggling marijuana MSO Schwazze defaults on restructured debt

Struggling Colorado-based marijuana multistate operator Schwazze defaulted on a restructured loan after it missed a $700,000 payment due March 3.As a result, the bankruptcy consultant that Schwazze enlisted last summer to refinance its debt due later this year – now totaling “approximately $11 million” – “exercised control” of about $1.5 million in cash in Schwazze bank accounts, according to the company’s March 13 filing with the U.S.

Securities and Exchange Commission. ADVERTISEMENT Schwazze and the bankruptcy consultant, Atlanta-based GGG Partners, did not respond to MJBizDaily requests for comment.

The default on the restructured loan is the latest complication for Schwazze, which operates cannabis retail outlets Colorado and New Mexico.The company once listed its shares as SHWZ on the NEO Exchange (now known as Cboe Canada) and the over-the-counter markets.

But last July, Schwazze announced it was transitioning to the OTC Expert Market, where quotes are “Unsolicited Only” and, according to an OTC Markets blog, only “broker-dealers and professional or sophisticated investors are permitted to view quotations.” About the same time, the company said it had restructured $32 million in debt that originally was to come due in February 2025.Many cannabis operators have significant debt coming due over the next year to 18 months, but Schwazze’s bill came due sooner than most.

Then, in December, Schwazze announced that previous financial reports detailing company activity from 2023 “should no longer be relied upon.” Formerly known as Medicine Man Technologies, the company rebranded as Schwazze in April 2020 and, only months later, cut ties with Medicine Man Denver, a cultivator and retailer. ADVERTISEMENT In the months leading up to the debt restructuring, Schwazze paid out $525,000 to settle a wage-theft claim filed by former budtenders.

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