Bankruptcy in hemp, MC Nutraceuticals

Hemp companies had a brief opportunity to access additional financing during the Green Rush. CBD processors with strong consultants were able to seek federal assistance from COVID-19 relief programs, unlike marijuana operators. Court records detail how hemp executives utilized bankruptcy proceedings before shifting into the emerging minor cannabinoid market. In some cases, filings suggest a pattern of companies accumulating debt, entering litigation with creditors, and pursuing restructuring.

Federal assistance

CBD sales had yet to slow down when a new billion-dollar market emerged. Unlike marijuana producers, hemp companies enjoyed the benefit of federal assistance. The Small Business Administration, for example, helped support at least one CBD business during the COVID pandemic.

Representing his financial consultancy, Jeffrey Worley described how he assists clients throughout the SBA loan process. He founded Columbia Consulting Group PLLC, which employed Worley’s second son as an intern. Bret was in a Director of Business Development role with CCG PLLC by 2019, according to The Wayback Machine. In his resume, Jeff received Paycheck Protection Program assistance for RFX North America.

The Boulder LLC initially functioned as a secured party in a financial agreement with a hemp processor. Worley received the loan before minor cannabinoid sales broke out. Reports by Cannabis Business Times suggested that CBD sales only rose 31% in 2020. In contrast, the market for isomerized, hydrogenated, and synthesized cannabinoids grew from $200,000 in 2020 to $1.3 billion the following year.

Jeffrey Worley has held numerous CPA and CFO positions throughout his finance career, such as at a San Antonio Travel Insurance Co., he worked for real estate/development firms including Duke Co, and an Executive in the restaurant industry.

Before MC

The Honey before the Nutraceuticals

Morgan Noble formed the LLC Honey Gold Processing in Colorado in 2018. Honey Gold Processing was active by January 2019, with Eric Duffner at the helm as an owner, Tom Blakley as COO, and Travis Newman managing the numbers. Noble is an alias used by a third-party Registered Agent, according to Wired and a 2021 report by the Inspector General of Palm Beach County.

RFX North America – Boulder was formed by Jeffrey Worley at the end of 2019. The LLC entered into a financial agreement with Honey Gold Processing the following February. Newman represented the latter entity in the records. It agreed to incorporate its laboratory equipment as collateral for a security interest held by RFX. Within months, RFX registered “Honey Gold” as a tradename after the entity managed by Noble went delinquent. Jeff was installed as CFO, Corey Shirley as President, and Lawrence Hourihan as CEO.

Jeff’s son began using forum sites under a Honey Gold username to advertise that he had kilograms of THC-free CBD distillate in stock. His March 2020 ad garnered positive engagement but came with a possible repercussion. RFX was hit with a lawsuit from its landlord just two days after the post. Behind the scenes, it was in debt for a facility in Colorado. According to a Pro Publica report, Worley then facilitated a $190K loan for the remediation company one month after Gunbarrell Properties filed suit for unpaid rent.

Restructuring out of the CBD sector

Through forum posts, Bret Worley began offering free samples to his business-to-business clients once RFX built a minor debt portfolio. Operations were housed in a Boulder, Colorado facility that it shared with a sister biotech firm. Duffner still runs SoluScience, which owns technology that alters the solubility of lipid compounds (such as cannabinoids) using a process void of emulsions.

Despite financial backing and a larger product inventory, the State of Colorado issued tax liens against RFX North America and Honey Gold. Both entities, according to court records, owed outstanding unemployment premiums and were served in November 2020. The CBD remediation company entered Chapter 7 one week after the state issued its lien. RFX did not immediately settle with Gunbarrell and instead sought bankruptcy protection.

Minor cannabinoid shift

Bret posted a sales pitch in December 2020 that featured a recycled photo from an old Honey Gold ad. MC Nutraceuticals was just two months old. And while the Worleys continued their careers in the honey market. The distillate began to take on a new form. The emerging minor cannabinoid market in the U.S. greatly reduced the need to Remediate For X. A sector of the market adopted a conversion-friendly mindset instead.

A LinkedIn account associated with Shirley also includes the President of Remediation and Sciences Technology PLLC — an entity that Jeff once managed. Hourihan made a statement in a January, 2022 press release representing RST, which agreed to supply the European market with compliant THC/CBN-free cannabidiol distillate.

Bankruptcy proceedings related to RFX North America Boulder LLC closed one year after it abandoned its countersuit against Gun Barrel Properties in May of 2022. Minorco Solutions, located at the Health Canada–licensed facility New Leaf Canada, provides a phone number associated with Corey Shirley. Lawrence Hourihan is the CEO of Minorco, according to provincial records. 

Building a debt portfolio

Hemp companies continue to experience banking freedom, in the meantime. Once the court closed the RFX bankruptcy case, MC obtained a $1 million line of credit in September 2023 from First Citizens Bank. They continued to grow on paper and build a larger debt portfolio. This came in the form of a new entity tied to a 2025 partnership with Asterra Labs. The move helped the minor cannabinoid wholesaler gain access to Asterra’s financial backer.

MC Botanicals LLC filed a complaint in a North Carolina District court due to concerns that its trade secrets became vulnerable. Asterra Labs denied the allegations and filed a countersuit seeking to recover approximately $1.6 million in outstanding credit from its partner.

The district court overseeing the case between MC and Asterra set the first hearing for January 21, 2026. Judge Terrance W. Boyle later dismissed, in part, the initial complaint filed by MC. He also granted the Worleys an additional five days to respond to the long list of counterclaims against it. On the same day as the hearing, American First National Bank served Worley and MC Botanicals with a citation in connection with a debt and contract lawsuit filed in Denton County.

First Citizens Bank served MC Nutraceuticals, Stratum 8, and the father-and-son team in March of 2026. The recent case alleges that they owe over $900,000 from the 2023 loan. Meanwhile, American Express filed a motion seeking a default judgment against MC Botanicals LLC. Bankruptcy protection laws, especially in Texas and North Carolina, for example, can aid struggling companies through debt relief programs. Do you think bankruptcy filings are valid for the volatile alternative cannabinoid market?