Popular cannabis brand declares Chapter 11 bankruptcy

The company, which is the first of its kind, has some good news for fans and customers.

Feb 22, 2025 - 17:04

While people like to smoke (and otherwise consume marijuana, companies operating in the cannabis space have struggled.

Retail sales in the cannabis space continue to rise, but brands have struggled to differentiate themselves. A number of major players have declared bankruptcy because marijuana remains a commodity.

Even top-tier retailers, including Las Vegas-based Planet 13, which offers an impressive complex with a retail store, consumption lounge, and a restaurant have struggled to duplicate that success in other markets. When it comes to cannabis and marijuana retail brands, no player stands out.

No company has become the Coca-Cola or Pepsi of the marijuana industry. In reality, every brand is closer to being a store brand than even having the name recognition of RC Cola or Polar Soda.

It's hard to charge a premium price when the consumer does not see much differentiation between brands. In addition, the cannabis audience tends to be well-educated and know the product.

They will pay for the right flower and THC content, but brand names and labels have yet to mean much. The market has also become filled with celebrity brands. It's easier to market marijuana products from Mike Tyson or Tommy Chong than it is to create a standalone brand.

Perhaps that's why Bright Green Corporation has struggled with the company filing for Chapter 11 bankruptcy protection.

Cannabis companies have struggled to diffefrentiate their prdocuts.
Image source: Shutterstock

Cannabis sales are climbing

"Revenue in the Cannabis market in the United States is forecasted to reach 45.35 billion in 2025. The revenue is anticipated to demonstrate an annual growth rate (CAGR 2025-2029) of 2.24%, leading to a market volume of $49.56 billion by 2029. When compared globally, the United States is expected to generate the highest revenue in 2025,," according to data from Statista.

The challenge for companies isn't the demand for cannabis; it's making consumers want one brand over another. That has been part of the struggle for Bright Green Corporation, which filed for Chapter 11 bankruptcy in late January.

"Bright Green Corporation produces and exports legal cannabis, cannabis extracts, and tetrahydrocannabinol in the United States. Its products are used in research, manufacturing, and export, as well as for the production of medical cannabis products and preparations. The company was incorporated in 2019 and is based in Grants, New Mexico," according to its profile on Yahoo's stock ticker page.

The company trades under the symbol BGXX and it has been trading below $0.05 per share.

Unlike many of its rivals in the marijuana space, however, the Chapter 11 filing won't turn into an asset sale or a liquidation. Bright Green Corporation has a buyer.

Bright Green finds a buyer

Bright Green Corporation has entered into a Restructuring Support Agreement with Lynn Stockwell, a major shareholder of the company, to restructure the company. To implement the terms of the RSA, the company will file, and the plan sponsor will support the company’s "Prepackaged Plan of Reorganization Under Chapter 11 of the Bankruptcy Code for. (the “Plan”)," according to a press release.

Stockwell will become CEO of Bright Green Corporation assuming court approval of the deal.

"The proposed Plan for the Bright Green Corporation, its effective date, generally provides, among other things, for the funding of an Exit Facility by the Plan Sponsor; and the payment in full in cash of all allowed administrative claims and allowed professional fee claims from the proceeds of the Exit Facility," the company shared.

Bright Green Corporation stock will undergo a 1 for 50 reverse split and unsecured creditors will be paid back in cash (20%) and equity (80%).

Stockwell, the founder of Bright Green Corporation, Drugs Made in America Acquisition Corp I, and Drugs Made in America Acquisition Corp II "seeks to align her vision to on-shore the end-to-end active pharmaceutical ingredient (“API”) manufacturing back to the United States," according to the press release.

Bright Green is the first publicly traded company in the U.S. that actually touches the cannabis flower.

More bankruptcy:

Trading of the company's shares has been suspended since September.

"Bright Green will seek to partner with Health and Human Services and designate scientific support for research at the existing facility in Grants, New Mexico, on a contract, cost-plus basis," it added.

The company is also exploring a franchise-based business model to build agriculture facilities in phases across West Texas, East Arizona, and Central New Mexico.