PharmaCann Goes Dark on May 20: Three States, 192 Layoffs, and a REIT Holding the Match

Nathan Fete, PharmaCann's chief manufacturing officer, signed the WARN notice on March 20. The state of Colorado received it the same week. It contained a single sentence that would empty out 5141 North National Western Drive in Denver. "The entire Facility will close on May 20, 2026," Fete wrote. "The action is expected to be permanent."

The facility — one of the largest licensed cannabis cultivation and processing sites in Colorado — would take 132 workers down with it. Trimmers. Growers. Drying-room staff. Data and farming roles. None of them were named in the WARN filing, which is the convention. Just a count and a date. (S1)

Across the country, on the same March 20, the Pennsylvania Department of Labor and Industry received a near-identical filing. This one closed PharmaCann's cultivation and manufacturing site at 111 Life Science Drive in Olyphant, Lackawanna County, and ended 60 more jobs on the same May 20 date. Two states, two notices, one Wednesday. (S5, S8)

PharmaCann, the privately held multistate operator that merged with LivWell in 2022 to become one of the largest cannabis companies in the country, is not just closing two plants. It is surrendering them. The closures stem from a February settlement with Innovative Industrial Properties — the largest publicly traded cannabis real estate investment trust. IIP had sued PharmaCann last fall for unpaid rent on three properties in New York, Ohio, and Pennsylvania, and the settlement required PharmaCann to vacate all three: New York and Pennsylvania by May 20, Ohio by May 26. The Colorado closure, separately driven, lands the same day as the first two. (S3)

The result is the largest single-week contraction by a top-ten cannabis operator since the post-pandemic peak. It also lands in a window where federal cannabis policy is supposed to be saving the industry, not unwinding it. The Drug Enforcement Administration's April 23 rescheduling of medical-cannabis products to Schedule III has unlocked balance sheets for operators with medical-heavy revenue mixes. Trulieve reported a 35% EBITDA margin in Q1, its best print in three years. PharmaCann, whose centers of gravity are Illinois adult-use and the kind of mature legacy markets where wholesale prices have collapsed, sat on the wrong side of that divide.

Colorado, where PharmaCann's 5141 North National Western Drive grow has run for years under the LivWell brand, is the canonical example of a mature legacy market unable to deliver returns. The state's adult-use program, the first in the country, hit a sales peak of approximately $2.2 billion in 2021. By 2025, annual dispensary sales had fallen to roughly $1.3 billion — a 40% decline. Wholesale prices for dried flower have dropped 65% over the same period. Retail flower now averages $3.12 per gram, or about $88.50 per ounce. (S2)

That price math turned cultivation in Colorado from a defensible business into a losing one. The state lost roughly 40% of its licensed growers between 2021 and 2025. PharmaCann is not the first MSO to leave. In the same week PharmaCann filed its WARN notice, Native Roots — co-founded by Josh Ginsberg — announced it was selling 17 of its 21 Colorado stores to Verdant Capital Partners, also without including its grow facilities in the deal. The Cannabist Company has been sued over approximately $400,000 in unpaid bills and has closed six locations since its 2020 acquisition of the Green Solution chain. (S2)

PharmaCann's path out of Colorado runs through Minneapolis-based Vireo Growth. On December 16, 2025, Vireo announced a definitive agreement to acquire PharmaCann's 17 LivWell-branded dispensaries for approximately $49 million in newly issued subordinate voting shares. The deal will lift Vireo's total Colorado retail footprint to 41 dispensaries, making it the largest cannabis retailer in the state. It does not include any of PharmaCann's grow facilities. Those are closing. (S6, S7)

The catalyst for everything else was the Innovative Industrial Properties lawsuit. IIP, the New York-listed REIT that pioneered sale-leaseback financing for cannabis cultivators, had been pursuing PharmaCann throughout 2025 for missed rent on properties IIP owns and leases back to operators. The February settlement traded litigation for surrender: monetary judgments for the unpaid rent, and turnover of the three contested properties by late May. IIP said in a March 16 release that it is "actively working on retenanting these properties and is in active discussions with prospective tenants for all three." (S3)

PharmaCann retained three other IIP-leased properties — 205,000 square feet in Michigan, 58,000 in Massachusetts, and 66,000 in Illinois — on restructured leases executed between April 2025 and March 2026. But losing three high-volume cultivation properties in the same month was the kind of blow that forced the broader exit. The Denver closure, which PharmaCann had been managing toward independently, came with the same May 20 deadline. (S3)

The same pattern is now visible elsewhere. On May 13, Ascend Wellness Holdings, a top-five MSO operating in seven states, filed a WARN notice in Michigan to close its Lansing cultivation facility and lay off 95 workers on June 26. The Michigan adult-use market is among the largest in the country but has been operating under wholesale prices nearly as compressed as Colorado's, and the state legislature is debating a wholesale tax that producers warn will push more operators out. (S4)

Mason Tvert, a partner at Strategies 64 and one of the architects of Colorado's 2012 legalization initiative, said the contraction was years in the making but only became unavoidable in 2025. The collapse, in his telling, was not a failure of the legal market but a maturation of it — toward a thin-margin commodity-retail business that more closely resembles liquor or convenience than the early speculative cannabis era.

“We sort of realized that ten years from now they would be owning a liquor store, but with more rules.”

— Mason Tvert, Partner, Strategies 64

Joe Aragona, the Michigan state representative who chairs the Regulatory Reform Committee, told WILX last week that the legislature is now openly contemplating intervention to slow the bleed. "We need to step up, help out that industry," Aragona said. "It's not the industry it was even just a couple years ago, where things were growing and booming." Chris Swope, the Lansing city clerk who oversees the city's dispensary licensing, told the same outlet that "we have seen some retraction in the market. We've seen the number of grows has decreased since we initially put the ordinance into place." (S4)

On the buy side, the math looks different. John Mazarakis, the chief executive of Vireo Growth, framed the LivWell acquisition in December as a continuation of his company's roll-up strategy in distressed markets. "This transaction will complement our other recently acquired assets in Colorado," Mazarakis said in the announcement, "and reflects the continuation of our strategy to continue growing our business through accretive M&A." For Vireo, mature legacy markets at the bottom of a price cycle are buying opportunities for those with the share float to pay for them. (S7)

1. May 20, 2026 — PharmaCann surrenders New York and Pennsylvania properties to IIP; Denver and Olyphant cultivation sites go dark.
2. May 26, 2026 — PharmaCann surrenders Ohio property to IIP.
3. June 26, 2026 — Ascend Wellness Lansing cultivation facility scheduled to close, 95 layoffs.
4. First half of 2026 — Vireo-LivWell asset transfer expected to close pending state and local regulatory approval.
5. Q2 2026 earnings season — Watch which other MSOs follow PharmaCann's playbook in Colorado, Michigan, Oregon, and other legacy adult-use markets where wholesale pricing has compressed.

Back in Denver, the May 20 closure will be the most visible single act in PharmaCann's retreat. The 5141 North National Western Drive facility had been one of the largest cannabis production sites in Colorado for nearly a decade. Its 132 workers will receive their final paychecks the same week Trulieve and Curaleaf hold investor calls in Tallahassee and New York to walk analysts through the federal-rescheduling tailwind. Two states' worth of PharmaCann employees, in the broader sense, are being told a story about an industry that just won a major federal victory; they are simply not in the part of it that benefits.

Nathan Fete's WARN notice asked the state of Colorado to make required services available to the affected workers. It contained no forward-looking statement about whether PharmaCann would re-enter Colorado cultivation. It did not have to. By the time the facility goes dark on the morning of May 20, the answer will be obvious.