October 18, 2022

Filing Type:

Company Counsel: McCarthy's

Trustee: EY

Trustee Counsel: Aird & Berlis



CannTrust Holdings Inc., an Ontario-based cannabis company, filed an NOI on October 18. The company and certain of its subsidiaries were previously subject to CCAA proceedings as a result of, among other things, the suspension of the company's cannabis licenses and the issuance of a cease trade order ("CTO") by the OSC. During the CCAA proceedings, the company obtained court approval to create a new wholly-owned subsidiary, CannTrust Equity Inc. (now Phoena Holdings Inc.) and to transfer to Phoena Holdings the ownership of its wholly-owned subsidiary, Phoena Inc., which was the primary operating entity of the CannTrust group of companies. Despite the implementation of the CCAA plan and the transaction, CannTrust Holdings remains subject to the CTO. To obtain a discretionary order from the OSC revoking the CTO, CannTrust Holdings would be required to cure its disclosure defaults under applicable securities laws, which would include restating certain historical financial statements and obtaining an audit opinion from a qualified independent auditor. The company determined that it was not feasible to do this before November 30 to revoke the CTO, and determined that it is in the best interests of its stakeholders to make a proposal to its creditors under the BIA to address its remaining liabilities, dispose residual assets, and dissolve before November 30. EY is the proposal trustee. Counsel is McCarthy's for the company and Aird & Berlis for the proposal trustee.

By Dina Milivojevic