VANCOUVER, BC, CANADA – 2020 February 13 – Restructur Advisors, a partnership of experienced executives, is pleased to announce the launch of the first advisory firm focused on restructuring and turnarounds of distressed companies in the cannabis and cannabinoid sector. Restructur Advisors was created to help preserve and even create value for shareholders and creditors in companies facing financial distress, insolvency, compliance failures, and/or complex litigation.
The cannabis/cannabinoid industry is facing an unprecedented collapse in company valuations as the sector transitions from the pre-legalization hype to valuations based on operational excellence and realized revenue growth. This challenge is compounded by a number of factors including: (i) significant compliance burdens, (ii) an inability to access traditional banking services, (iii) continued competition from the illegal market, (iv) inexperienced management and directors, and (v) the ongoing stigma of illegality (in the U.S.).
The valuation collapse and challenges outlined above have made raising equity capital very difficult, creating a wave of financial distress as companies run short of operating capital, debt instruments come due and cannot be refinanced, or in the worst case, a company faces regulatory action for compliance breaches. Many analysts are now predicting 2020 will see a number of cannabis companies defaulting on debts, trying to restructure, entering bankruptcy, and even facing shareholder litigation.
When faced with financial distress, the unique operating dynamic and challenges inherent in the cannabis/cannabinoid industry mean that typical restructuring and turnaround advisors are not well positioned to assist. Distressed companies in the sector often face unique challenges in terms of obtaining rescue financing, asset transfers, and regulatory compliance. While Canada is beginning to see the use of restructuring legislation (Companies Creditors Arrangement Act) to address financial distress, companies in the U.S. cannot access traditional federal restructuring legislation, specifically Chapter 11 for restructuring and Chapter 15 for recognition of foreign restructurings. This compounds the difficulty around U.S. companies in financial distress or Canadian companies with U.S. assets.
“In the face of the ongoing shakeout in the cannabis sector in North America, many management teams and Boards of Directors are increasingly faced with tough decisions and increased risk of liability,” said Restructur Advisor’s Managing Partner, Blair Jordan. “What is unique about our team is that we combine operational and capital markets experience with some of the only executives in North America who have actually been through a court-protected cannabis company restructuring.”
About Restructur Advisors
Restructur Advisors is the first restructuring and turnaround advisory firm dedicated solely to the global cannabis and cannabinoid industry. The firm, based in Vancouver, Canada, is comprised of impartial, experienced financial and operational restructuring experts with real cannabis industry expertise. Clients are both insiders such as management, directors, committee members, and more as well as external stakeholders such as independent committee members, creditors, debt holders, shareholders, and regulators.
Restructur Advisors provides corporate and stakeholder strategic advice, interim and turnaround leadership, and transactional services alongside, and in tandem with, the other service providers working with distressed clients such as accounting firms, law firms, and investment banks.
For more information, please contact: Blair Jordan
Managing Partner 778.899.6281
Blair.Jjordan@restructuradvisors.com
