One of Colorado\u2019s largest marijuana companies will soon stop growing its own cannabis.<\/p>\n
Green Dragon will close its Denver cultivation plant at 830 Wyandot St. in the Lincoln Park neighborhood at the end of the month, according to Cory Azzalino, CEO of Green Dragon\u2019s California-based parent company Eaze.<\/p>\n
\u201cIt\u2019s not economical despite our team\u2019s best effort to improve yields,\u201d he said of running the 92,000-square-foot building. \u201cAt the end of the day, the facility costs substantially more to run than to buy product in the market. You\u2019d either have to double yield or have the market price double for it to make sense.\u201d<\/p>\n
A down Colorado marijuana market is a major driver in the decision, Azzalino said.<\/p>\n
According to the Colorado Department of Revenue, the average price for a pound of bud is $655, down from a recent high of about $1,300 in October 2021. State tax revenue from marijuana sales has dropped each of the past four years and is tracking to do the same in 2025.<\/p>\n
About 45 employees will be let go as part of the shuttering, Azzalino said. He said Denver\u2019s rising minimum wage over the past four to five years also contributed to the financial pinch.<\/p>\n
\u201cThe facility was about to go through a union contract negotiation and process, which would likely increase costs further,\u201d he added.<\/p>\n
Despite the closure, Azzalino said Green Dragon\u2019s 15 Colorado dispensaries will remain open with third-party cannabis.<\/p>\n
\u201cWe\u2019ll buy and we\u2019ll continue to offer our Green Dragon products, rather than growing cannabis or producing our own pre-rolls,\u201d he said.<\/p>\n
According to previous BusinessDen reporting, Green Dragon\u2019s lease at 830 Wyandot will expire in January 2031. Texas-based landlord Don Ball, who bought the property in October for $11.5 million, said he\u2019s unsure whether he will continue to receive the $145,000 monthly rent payment he\u2019s owed.<\/p>\n
\u201cThe first time I talked to Cory, he said, \u2018My intention is to pay you on time for a long time,\u2019\u201d said Ball, who recently\u00a0acquired\u00a0another Denver marijuana grow. \u201cBut he said business declined sharply over the last few months.\u201d<\/p>\n
Ball hopes to get another cannabis growing tenant in there soon \u2014 something Eaze attorneys said can happen \u201cpromptly\u201d in a notice-to-vacate letter sent to him.<\/p>\n
\u201cI\u2019ll be as cooperative as I possibly can be because it\u2019s just as much in their interest as it is in mine,\u201d Ball said of getting the space re-leased.<\/p>\n
Ball said he still hasn\u2019t gotten the rent owed in early June, which incurs a $400 fee and 1% monthly interest.<\/p>\n
\u201cI prefer not to comment because it\u2019s going to be a legal battle,\u201d Azzalino said of future monthly payments.<\/p>\n
This isn\u2019t the first time Eaze has talked of\u00a0closing\u00a0the facility.<\/p>\n