California-based marijuana delivery service Eaze faces foreclosure

The largest marijuana delivery company in the biggest regulated U.S. cannabis market is facing financial troubles.

Jim Clark, a tech billionaire and Eaze’s largest investor, is foreclosing on the company.

The development was first reported by WeedWeek.

Cory Azzalino, CEO of the San Francisco-based delivery business, said Eaze will continue to operate during the foreclosure process.

Clark, who founded Netscape and has invested in Eaze since at least 2021, foreclosed on the delivery service after it defaulted on a loan, SFGate reported.

According to a court filing in Delaware this month, Clark is demanding all of Eaze’s collateral.

The roots of the crisis date to August 2022, when a shell company co-owned by Clark issued a $36.9 million loan to Eaze that gave him the right to take control of the cannabis delivery company if it didn’t meet monthly revenue targets, according to a 2023 lawsuit filed by other Eaze investors.

In their 2023 suit, the investors accused Clark of illegally misrepresenting Eaze’s financial situation to attract more investment in the company.

A San Francisco judge dismissed the case in November 2023.

Eaze’s Azzalino said at the time that the company was still in a “healthy financial position.”

Last month, Eaze Technologies and union negotiators reached a settlement to avert a work stoppage across California on April 20, the biggest retail day of the year for the marijuana industry.

According to an MJBizDaily reports, 500 of the company’s delivery and depot employees in Los Angeles, Northern California, Orange County and San Diego were ready to walk off the job after negotiations broke down in late March to secure the first labor contract between staffers and Eaze.