U.S. tobacco firm Pyxus International is divesting its Canadian cannabis subsidiaries, with plans to sell off the companies and “focus on its more profitable tobacco and e-liquid businesses.”
The three subsidiaries – Figr Brands, Canada’s Island Garden and Figr Norfolk – have all filed for and received creditor protection under Canada’s Companies’ Creditors Arrangement Act (CCAA), Morrisville, North Carolina-based Pyxus said in a news release.
Pyxus International itself filed for bankruptcy protection last June.
The company entered the cannabis industry in 2018 when it purchased Canada’s Island Garden and an 80% stake in Goldleaf Pharm.
“Our strategic decision to exit cash flow negative cannabinoid operations will allow us to reduce corporate – selling, general and administrative expenses – and sharpen our focus on growing our more profitable tobacco and e-liquid businesses,” Pyxus President and CEO Pieter Sikkel said in the release.
“We maintain our belief that there is value in FIGR and its growth can be accelerated with the right capital structure and partner.”
The three Canadian subsidiaries have received a debtor-in-possession loan from another Pyxus subsidiary.
A number of troubled Canadian marijuana companies have received CCAA creditor protection in recent years, including Sunniva, PharmHouse, James E. Wagner, Green Growth Brands, Muskoka Grown and Beleave.
