Goodblend Ordered to Pay $15.5M, Vacate Pittsburgh Facility

A Pennsylvania court this week ordered Atlanta-based multistate operator Parallel’s subsidiary, now-defunct medical cannabis grower Goodblend Pennsylvania LLC, to pay $15.5 million and vacate its Pittsburgh facility by Nov. 1.

Allegheny County Court Judge Christine Ward approved the request by property owner IIP-PA 8 LLC, an offshoot of cannabis industry landlord Innovative Industrial Properties Inc. (NYSE: IIPR), to remove Goodblend from its premises, according to Law360. If the company fails to leave by the deadline, any remaining items on the property will be deemed as abandoned and will belong to IIP-PA 8 LLC.

“Effective November 1, 2023, possession of that portion of 2840 New Beaver Avenue, Pittsburgh… occupied by the defendants, their successors and/or assigns, is hereby awarded to IIP-PA 8 LLC,” the order said. “All personal property, equipment and/or goods remaining in the property as of November 1, 2023 are considered abandoned by the defendants and the property of the plaintiff.”

The judgment against Goodblend includes $5.8 million worth of unpaid rent since October 2022. A non-jury trial set for Thursday to address the rent dispute has been canceled due to the court’s decision.

Earlier this year, Goodblend contended that state regulations prevented their eviction, citing strict guidelines on medical cannabis handling, storage, and the need for an approved shutdown plan. Despite this, the company later announced its intentions to cease operations.

Disagreements also arose among Goodblend’s stakeholders. Surterra Holdings Inc., the majority owner of Goodblend and another Parallel-controlled entity, pushed for the company’s dissolution due to insolvency, but was initially opposed by, Medical Bloom Inc., the minority owner. In August, the court supported the dissolution, instructing Goodblend to finalize plans for the facility’s closure.

Per Judge Ward’s order, the termination of Goodblend’s 20-year lease will occur by the end of this month. If the company fails to leave, IIP-PA 8 LLC will take immediate control of the premises and any items left behind, and Goodblend will face additional legal costs.

Just over a year ago, Parallel and IIP celebrated the acquisition of the Pittsburgh purchase — a move then touted as a major achievement. Parallel’s subsidiary initially bought the property for $22 million, only to sell it to IIP for nearly double at $41 million the following day. Subsequently, Goodblend secured a 20-year lease on the site.

However, things shifted when Parallel revealed it would not proceed with its expected public offering, pegged at an estimated $1.8 billion, sending ripples through IIP’s valuation.

Both firms have been stuck in court since then. Investors sued IIP, alleging the company failed to adequately scrutinize its primary tenants, with Parallel and Kings Garden being some its biggest busts.

Meanwhile, Parallel is languishing in its own legal quagmire. The company has found itself embroiled in securities fraud lawsuits in various state courts, including in New York, Texas, and Florida. The core allegations revolve around claims that the firm, along with its former CEO William “Beau” Wrigley Jr. and other top brass, misled investors about the purchase of debt — not disclosing its default status or specifying the intended use of the raised funds.