Californian cannabis distribution firm Herbl has collapsed leaving potentially tens of millions of dollars in unpaid invoices in its wake.
According to MJBiz Daily, which broke the story, the downfall of Herbl, which is understood to have handled $700m of sales last year, marks California’s highest profile collapse to date.
Industry stakeholders have warned that Herbl falling into receivership ‘should be a wake-up call to policymakers that all is not will’ with the current cannabis landscape in California.
Wesley Hein, president of the Cannabis Distribution Association, a trade group representing distributors, said: “Herbl’s downfall is a stark reminder that if state and local policymakers don’t immediately address regulations, taxes and the illicit market, we are going to see the continued erosion of a vibrant industry.”
Although Herbl has not yet officially confirmed its descent into receivership, MJBiz Daily suggests that its downfall is common knowledge within the industry, with hundreds of staff reportedly stating they are now seeking jobs.
Many of the 1000+ cannabis retailers and brands that have worked with Herbl began reporting partially or fully unpaid invoices in spring, but the situation appears to have worsened over the past six weeks.
It is understood that under the terms of receivership, investors and other claimants are likely to be paid before brands.
Nearly all of Herbl’s workforce is thought to have been let go, meaning the chances of many brands receiving what they’re owed is even more problematic.
Ciencia Labs CEO Ben Mitchell said: “We’re trying to collect… But the fact is, unfortunately, we’re not going to get paid through Herbl.”