Canadian marijuana operator Indiva weighs options, including potential sale

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Canada’s leading producer of marijuana edibles, Indiva Limited, has hired a financial adviser to help the company evaluate an array of strategic options.

The London, Ontario-based company announced Tuesday that it hired SSC Advisors to help weigh potential strategic alternatives to maximize shareholder value.

Some of those options include:

  • Financing alternatives.
  • A merger.
  • A reorganization of the company.

Indiva said it has no set timetable to complete the strategic review process and no specific decisions been made regarding the options.

In Indiva’s most recent consolidated interim financial statements, covering the quarter ended Sept. 30, 2023, the company warned of material uncertainties “that may cast significant doubt on the ability to continue as a going concern.”

Indiva had said it incurred losses in the quarter and previous periods, including accumulated deficits of 71.6 million Canadian dollars ($52.8 million) and negative working capital of CA$2.2 million.

“The company expects it will need to raise additional financing in the form of debt and/or equity in order to fund continuing operations and capital expenditures,” Indiva warned at the time.

“Even if the Company has been successful in raising funds in the past, there is no assurance that it will manage to obtain financing in the future.”

In the same announcement as the financial adviser, Indiva also disclosed it has entered into an amendment to the second amended and restated promissory note between, among others, itself and Canadian cannabis producer SNDL.

Pursuant to the agreement, the company said it will repay CA$2 million of the principal amount outstanding related to the promissory note and pledged to work to reduce other current liabilities in the near term.

In consideration of the repayment of CA$2 million, the company was able to remove a rule related to the note that it was to maintain a CA$2 million minimum unrestricted cash balance at all times.

The maturity date of the note remains Feb. 24, 2026.

Shares of Indiva are traded on the TSX Venture Exchange as NDVA.