A warehouse used by cannabis operator Green Dragon has sold for $11.4 million, as its parent company prepares to shut down operations amid wider turmoil and legal disputes.
Texas-based investor Donald A. Ball, operating as Kovak & Co., acquired the 91,981-square-foot Denver facility for about $124 per square foot, public records show. Ball told the Denver Business Journal he self-financed the deal after multiple commercial lenders declined.
“I think this one will be worth a few more million if (cannabis) gets legalized federally,” Ball said.
The Denver warehouse, built in 1970 and renovated in 2014, supplies 17 Colorado Green Dragon retail stores. Green Dragon holds a 10-year lease on the property through January 2031, according to the outlet.
The sale comes as Stachs LLC, which had owned both Green Dragon and California-based cannabis delivery platform Eaze, announced it will cease operations by year’s end. CEO Cory Azzalino cited “ongoing challenges of the California cannabis market” in a LinkedIn post last week.
An update on the future of the company’s assets is expected by mid-November, he wrote. The letter did not specifically mention the fate of Green Dragon.
Azzalino recently told Green Market Report in an email before the closure announcement, “The new ownership group is evaluating the status of each state’s operations and expects to make a decision prior to year end about what will continue to operate or be closed down.”
At a foreclosure auction in August, billionaire investor James Henry Clark’s FoundersJT acquired the Eaze assets for $54 million, after Clark had loaned the company $36.9 million in 2022 and foreclosed on the company in spring 2024. Clark and businessman Thomas Jermoluk reportedly owned 35% of Eaze through a shell company and were instrumental in the Green Dragon merger, according to a lawsuit filed by Green Dragon’s former owners, the Levine family.
In that merger, Eaze acquired Green Dragon, with Green Dragon’s founders – Lisa Leder, Andrew Levine and Alexander Levine – receiving a 30% ownership stake in Eaze and two board seats. However, the arrangement led to legal barbs, with the Green Dragon founders later suing Eaze for alleged fraud and misrepresentation of its finances.
That suit claimed Eaze was “on the brink of not being able to make its payroll before the Green Dragon acquisition closed.”
Azzalino denied those allegations at the time, insisting the company was in a “healthy financial position” and expected to be cash flow positive by the end of 2023 end. Now, he’s recently told the San Francisco Chronicle that Eaze “would be reopening under a new corporate structure potentially with new management, if it’s determined the new ownership group wants to keep it open.”
Ball’s purchase marks Kovak & Co.’s first Colorado acquisition and its westernmost to date, according to the journal. The property was previously owned by an LLC linked to Florida-based Best Properties, which bought it in 2017 for $11.5 million.
Adam Jackson writes about the cannabis industry for the Green Market Report. He previously covered the Missouri Statehouse for the Columbia Missourian and has written for the Missouri Independent. He most recently covered retail, restaurants and other consumer companies for Bloomberg Business News. You can find him on Twitter at @adam_sjackson and email him at adam.jackson@crain.com.
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The Green Market Report focuses on the financial news of the rapidly growing cannabis industry. Our target approach filters out the daily noise and does a deep dive into the financial, business and economic side of the cannabis industry. Our team is cultivating the industry’s critical news into one source and providing open source insights and data analysis
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