Lowell Farms said that on January 12, 2024, its subsidiary Cypress Holding Company surrendered possession of a 10-acre property in Salinas, California that it had been leasing since April 1, 2017.
The company said prior to vacating the premises, it had operated a cultivation facility, which includes four greenhouses totaling approximately 255,000 square feet.
Lowell's exit from the facility follows a year of negotiations with the facility's landlord, Tinhouse Partners. By September 2023, Lowell and Tinhouse had reached a settlement amending the terms of the lease. But by October, Tinhouse terminated the lease.
Lowell said it filed a lawsuit for breach of contract against Tinhouse, which subsequently filed counterclaims against Lowell, claiming damages of more than $36 million.
"[Lowell Farms] intends to vigorously defend itself against the claims made by the [Tinhouse]," the company said in a statement. "However, no assurance can be provided as to whether or not the company will prevail, and it may be required to pay significant monetary damages."
Colin Ferrian, a portfolio manager with Poseidon Asset Management, said this week's announcement came approximately one month after Lowell Farms notified employees it would be surrendering the property. He said the cultivation facility generated approximately 90% of the company's sales.
