Heritage Cannabis is the latest Canadian marijuana producer to obtain an order for creditor protection as a wave of insolvencies continues to sweep across the nation’s adult-use market.
Heritage sought and obtained the order for creditor protection from the Ontario Superior Court of Justice, the company announced in a Wednesday news release.
“The difficult but necessary decision to commence (Companies’ Creditors Arrangement Act) proceedings was made after careful consideration of the Company’s financial position, while evaluating all available alternatives and engaging in significant consultation with legal and financial advisors,” according to the company’s news release.
The initial order pursuant to the Companies’ Creditors Arrangement Act (CCAA) includes:
- A stay of proceedings in favor of Heritage and its Canadian subsidiaries.
- The appointment of KPMG as monitor.
The initial order also extends the stay of proceedings to certain unidentified U.S. affiliates of the company that are not applicants.
It’s unclear how much debt Heritage is carrying in total.
Heritage said the company’s senior secured lender, BJK Holdings, on April 1 demanded the repayment of debts worth approximately 8.4 million Canadian dollars ($6.2 million) owed by Heritage Group.
In the release, Heritage said its board of directors and management will remain in place under the general oversight of the monitor.
The company intends to seek approval of a sale and investment solicitation process (SISP), which, if approved, would allow interested parties to participate in the process.
Heritage anticipates the Canadian Securities Exchange, where its shares are traded as CANN, will place the company under delisting review.
In March, Canadian cannabis firm BZAM, which merged with The Green Organic Dutchman in 2022, was granted creditor protection.
Other cannabis-related CCAA rulings this year include:
- Retailer Trees Corp.
- Cannabis and accessories distributor Humble & Fume.
- Grower and processor Safari Flower Group.
