An intro to four ongoing court-supervised cannabis industry restructurings
Updated: Mar 8, 2020
There are currently four active cannabis industry related court-supervised restructurings ongoing. Here is a brief summary of the status of each one with links to the active dockets. We are monitoring each one and will provide key updates here, on our Twitter stream (@restructuradvs), and in our LinkedIn Cannabis Industry Restructuring & Turnaround Group.
On February, 13, 2020, Invictus MD Strategies Corp., Greener Pastures MD Ltd., Acreage Pharms Ltd. and 2015059 Alberta Ltd. (collectively the "Invictus Group“) sought and obtained an Initial Order of the Supreme Court of British Columbia pursuant to the Companies’ Creditors Arrangement Act ("CCAA"). PricewaterhouseCoopers Inc. Lcensed Insolvency Trustee was appointed as Monitor for the CCAA Proceedings. At a hearing yesterday there was a court order approving:
Extension of the initial stay of proceedings to May 29, 2020
Approval of the Interim Lending Facility up to $3,000,000
Approval of the Sales, Investment and Solicitation Process (“SISP”)
Engagement of a Chief Restructuring Officer (“CRO”)
Approval of the Key Employee Retention Plan (“KERP”)
We believe there may already be a bidder at the table for the primary asset - the Alberta facility. GenCanna Global USA, Inc, GlenCanna Global, Inc. and Hemp Kentucky, LLC On January 24, 2020, Pinnacle, Inc., Crawford Sales, Inc., and Integrity / Architecture PLLC filed an involuntary chapter 11 petition under title 11 of the United States Code (the “Bankruptcy Code”) against GenCanna Global USA, Inc. On February, 6, 2020, GenCanna Global USA, Inc. consented to the involuntary petition and on February 5, 2020 two debtor affiliates, GenCanna Global, Inc. and Hemp Kentucky, LLC filed their own voluntary chapter 11 petitions under the Bankruptcy Code. As a result of these petitions the Debtors consented to, or commenced, the current chapter 11 bankruptcy cases (the “Cases”). The Cases will be jointly administered for procedural purposes meaning all pleadings will be maintained on the case docket for In re GenCanna Global USA, Inc., Chapter 11 Case No. 20-50133-grs (the "Main Case Docket"). Today the Debtors were in court seeking an amendment to the Interim Financing Order to increase the amount of the Initial DIP Loan. Next Steps: March 4 - Scheduled Final Hearing on the Interim Financing Order March 9 - Meeting of Creditors
Wayland Group Corp., Maricann Inc., and Nanoleaf Technologies Inc. On December 2, 2019 (the “Filing Date”), Wayland Group Corp., (“Wayland”), Maricann Inc. (“Maricann”) and Nanoleaf Technologies Inc. (“Nanoleaf”, and collectively with Wayland and Maricann the “Companies” or the “Applicants”) applied for and received an order (the “Initial Order”) for protection pursuant to the Companies’ Creditors Arrangement Act (“CCAA”), R.S.C.1985, c.C-36, as amended, from the Ontario Superior Court of Justice Commercial List (the “Court”). The Initial Order was amended on December 4, 2019 (the “Amended and Restated Initial Order”). The Amended and Restated Initial Order was amended on December 16, 2019 (the “Second Amended and Restated Initial Order”). The Second Amended and Restated Initial Order includes among other things, a stay of proceedings against the Companies, and the appointment of PricewaterhouseCoopers Inc., LIT as monitor of the Applicants (“PwC” or the “Monitor”). On February 12, 2020, the Court issued the Approval and Vesting Order, which, approved a couple of key transactions, authorized the postponement of Wayland’s annual meeting of shareholders until further order of the Court, etc.
On December 2, 2019, AgMedica Bioscience Inc. (“AgMedica”) and certain of its subsidiaries (collectively, the “Applicants”) were granted an initial order (as amended or amended and restated from time to time, the “Initial Order”) under the Companies’ Creditors Arrangement Act (the “CCAA” and the “CCAA Proceedings”) by the Ontario Superior Court of Justice (the “Court”). All the legal entities comprising the Applicants are privately held companies incorporated under the laws of Ontario or Canada, with the sole exception of Unique Beverages (USA) Inc., a dormant corporation incorporated under the laws of Delaware.
The court-approved SISP is now underway. A proposed transaction to sell one of their properties is scheduled to close March 2, 2020.