Canadian marijuana cultivator The Flowr Corp. received an initial creditor protection order from a Canadian court as the Toronto-based company tries to conduct a sale and solicitation process and exit creditor protection “as a going concern.”
The initial order under the Companies’ Creditors Arrangement Act (CCAA) was granted Thursday by the Ontario Superior Court of Justice.
Flowr has simultaneously taken a debtor-in-possession loan of 2 million Canadian dollar ($1.5 million) from 1000343100 Ontario, which is 50% owned by Kelowna, British Columbia-based cannabis company Avant Brands.
In a factum submitted to the court, Flowr said it has “undertaken a complete transformation of its business operations aimed at right-sizing the organization with a view to reaching profitability” and repaid bank debt that was once worth nearly CA$24 million.
However, Flowr told the court that its “monthly cash expenditures exceed its cash receipts” and that it would “run out of liquidity in the next 10 days” unless interim financing was approved.
Flowr cut 40% of its staff this summer and sold a cannabis research facility and an outdoor and greenhouse cultivation site.
The company also retreated from international cannabis markets earlier in the year, selling its Portugal facilities and pulling out of Australia, Uruguay and Spain.
Flowr is the latest of a growing number of Canadian cannabis firms to receive CCAA creditor protection orders, following closely on the heels of Sugarbud Craft Growers Corp and Zenabis Global.
Documents related to Flowr’s CCAA proceedings are available from CCAA monitor Ernst & Young.
