One of Canada’s oldest cannabis producers seeks creditor protection

Two federally regulated cannabis companies, including one of the earliest licensed producers in Canada, sought creditor protection this week.

Wayland Group on Monday said it is seeking creditor protection to pursue restructuring and consider financing arrangements.

Wayland subsidiary Maricann became the 19th licensed producer in Canada by receiving its federal approval in early 2014.

NVS Chartered Accountants resigned as Wayland’s auditor, effective Dec. 3. PricewaterhouseCoopers is the company’s court-appointed monitor.

Also Monday, federally regulated cannabis company AgMedica Bioscience and its subsidiary, Wellworth Health, applied for creditor protection to restructure the business.

AgMedica’s court filing contained an ominous warning for the cannabis industry.

“It is the Proposed Monitor’s understanding that many other licensed producers of cannabis in Canada face similar pressures due to capital market conditions that have challenged the cannabis industry in recent months,” it stated.

In a Superior Court filing, AgMedica said its liquidity issues are a combination of:

  • Price competition with the illicit market.
  • Challenges with the rollout of retail models across the country.
  • Learning curves in adjusting to customer demands.
  • The retraction of capital raised from public investors to complete an initial public offering.
  • Poor capital market conditions for the cannabis sector.

The company said a debt financing package fell through in late October.

Struggling to cope with lower-than-expected revenue, some of Canada’s largest cannabis companies in recent months have resorted to layoffs and closed cultivation facilities to conserve cash.

Quebec producer Hexo Corp. suspended cultivation at a Niagara facility it acquired only months earlier in a major M&A deal.

Recent cannabis industry pressures are not limited to Canada.

In October, American cannabis company DionyMed Brands – which had its head office in Vancouver, British Columbia, because of its Canadian stock listing – said it was unable to restructure its debts or find a buyer for the company.

Later that month, FTI Consulting Canada was appointed receiver and manager of DionyMed’s assets.

AgMedica is privately owned.

Wayland Group trades on the Canadian Securities Exchange as WAYL.

Read AgMedica’s court filing is available here.

Matt Lamers is Marijuana Business Daily’s international editor, based near Toronto. He can be reached at [email protected].
2 comments on “One of Canada’s oldest cannabis producers seeks creditor protection
  1. George on

    ‘Wayland Group on Monday said it is seeking creditor protection to pursue restructuring and consider financing arrangements.”
    One of the reasons stated for the need for bankruptcy protection was:
    ”Price competition with the illicit market.”

    This won’t happen in California because the author of California’s prop 64 included this language.

    Business and Professions Code – BPC

    DIVISION 10. Cannabis [26000 – 26250]
    26013.
    (a) Licensing authorities shall make and prescribe reasonable rules and regulations as may be necessary to implement, administer, and enforce their respective duties under this division in accordance with Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code. Those rules and regulations shall be consistent with the purposes and intent of the Control, Regulate and Tax Adult Use of Marijuana Act.
    (c) nor shall the regulations make compliance so onerous that the operation under a cannabis license is not worthy of being carried out in practice by a reasonably prudent businessperson.

    26014. (a) The bureau shall convene an advisory committee to advise the licensing authorities on the development of standards and regulations pursuant to this division, including best practices and guidelines that protect public health and safety while ensuring a regulated environment for commercial cannabis activity that does not impose such barriers so as to perpetuate, rather than reduce and eliminate, the illicit market for cannabis.

    You see we have laws that preclude the BCC (bureau of cannabis control) from making regulations that perpetuate the illicit market. This is statutory law in California. LOL

    Reply

Leave a Reply

Your email address will not be published. Required fields are marked *