March 1, 2019

Filing Type:

Company Counsel: BLG

Trustee: EY



Ascent Industries (CSE:ASNT), which is in the business of cultivating, producing, processing, developing and distributing cannabis and cannabis-based products in British Columbia and Nevada, US, filed for protection under the CCAA on March 1, owing approximately $7.0MM to Gulf Bridge, a Cayman Islands-based company. Since cannabis is a regulated product, the company's ability to generate revenue is largely dependent on its holding the necessary licences. In September 2018, Health Canada partially suspended the company's cannabis licences, which are held by its subsidiary Agrima Botanicals, as a result of Agrima's failure to meet certain compliance requirements. In November 2018, Health Canada further notified Agrima of its intention to revoke its licences for alleged contraventions of the Cannabis Act. Due to Health Canada's suspension and proposed revocation of the company's cannabis licences, the company is no longer able to legally produce or distribute cannabis in Canada. This has decimated the company's ability to generate positive cash flow, and is the primary cause of its financial difficulties and corresponding insolvency. In addition, the suspension and proposed revocation of the licences has made it virtually impossible for the company to raise money through the capital markets to resolve its liquidity problems. The company engaged Clarus Securities to assist it in conducting a sale and investment solicitation process for its business. Although the company was ultimately unable to conclude a sale transaction, a number of potential purchasers remain interested. EY was appointed monitor. Counsel is BLG for the company and Fasken for Gulf Bridge.