A Nevada hemp and marijuana breeder is looking for Chapter 11 bankruptcy protection, telling a federal court that COVID-19 shutdowns in Europe left the company unable to pay its debts.
Pharmagreen Biotech in Carson City breeds cannabis clones – sometimes called liners, plantlets or young plants – for sale to growers in both the hemp and marijuana markets.
The company also provides cold storage for clones developed elsewhere as well as extraction services.
Company CEO Peter Wojcik told investors that the company agreed to “toxic terms” on some loans in early 2020, just before the COVID-19 pandemic chilled global commerce.
Unable to execute plans in Europe, the company was forced into bankruptcy, he said.
“These lenders are seeking very toxic conversions that would essentially wipe out the company’s valuation,” he said in a statement.
“After taking much time to carefully analyze our strategic options, we have decided that a voluntary Chapter 11 filing provides the best possible outcome.”
Pharmagreen told the court in its filing that it has less than $50,000 in assets but debts between $500,001 and $1 million.
Federal bankruptcy protections largely remain off-limits for state-legal marijuana companies.
Because hemp is legal, though, companies may be treated differently in federal courts.
Pharmagreen trades on the U.S. over-the-counter markets as PHBI.