NEWS BRIEF

Beleave joins growing list of Canadian cannabis insolvencies

Beleave has become the latest in a wave of Canadian cannabis companies seeking creditor protection.

The Toronto-based company will apply for a creditor protection order from the Ontario Superior Court of Justice on Friday, according to a news release.

The company has arranged a debtor-in-possession loan from Hegedus Consulting Service to fund the proceedings under Canada’s Companies’ Creditors Arrangement Act, along with a potential stalking horse offer to purchase Beleave’s assets.

“The Beleave Group is insolvent and faces an imminent liquidity crisis,” according to a court filing.

“Cash flows have been negative since inception … Beleave Group has significant liabilities and a number of creditors have demanded payment, have sued or have threatened to sue.”

Beleave’s assets were worth about 23.3 million Canadian dollars ($17.3 million) at the end of 2019, the filing notes, against liabilities of about CA$18 million.

Auxly Cannabis Group launched a lawsuit against Beleave in late 2019, alleging the company breached the terms of a CA$5 million funding deal.

Other Canadian cannabis firms to seek creditor protection in recent months include:

Shares of Beleave trade on the Canadian Securities Exchange as BE.

Documents related to Beleave’s creditor protection application are available from proposed monitor Grant Thornton.

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