A receivership process is underway for the assets of Pharmaco, an indirect subsidiary of Red White & Bloom. On December 26, 2024, the Circuit Court in the City of Pontiac, County of Oakland, Michigan, approved a stipulated order appointing Trust Street Advisors, LLC, through its agent Gene R. Kohut, as the receiver for Pharmaco's assets.
The company made the headlines back in 2023 when they pleaded guilty to bribing a top official for securing a cannabis license. According to Crain's Detroit, the bribe included payments of $4,000 a month for the official's wife, who was paid as a "consultant" during the process. Pharmaco, acquired by an RWB subsidiary in February 2022, has been involved in licensed medical and adult-use retail operations and limited cultivation activities in Michigan. However, the company's operations are no longer aligned with RWB's primary business objectives, the company said in a press release. The receivership is intended to reduce operating costs, lessen working capital needs, and address debt obligations tied to Pharmaco's activities.
The Receivership Order was issued following defaults under a senior secured loan agreement between Pharmaco and its lender. The court-approved order grants the receiver full control over Pharmaco's assets." The receiver is responsible for managing or selling these assets. The lender retains its senior lien position and is entitled to any sale proceeds or may credit bid its secured claim, as permitted under Michigan law.
RWB stated, "Pharmaco is required to cooperate with the receiver to ensure orderly operations during the receivership." The senior secured lender will cover receivership costs, ensuring the receiver has the resources to maximize the value of the assets. Select RWB management may also support the receiver during this process.
RWB's Focus Beyond Pharmaco
While the receivership affects Pharmaco's operations, RWB confirmed that its other activities remain uninterrupted.
For more information:
Red White & Bloom
redwhitebloom.com