Lightbox Enteprises Ltd. dba Dutch Love Cannabis

Lightbox Enteprises Ltd. dba Dutch Love Cannabis, a licensor and service provider with respect to the "Dutch Love" cannabis store brand, continued its NOI proceedings (which were commenced on November 1) under the CCAA on November 24. Like many other cannabis retailers, Lightbox was negatively impacted by the challenging business climate for cannabis retail operations and the COVID-19 pandemic, which had a significant impact on both the company's sales and operations. In 2021, Lightbox retained Kronos Capital Partners Inc. and Canaccord Genuity Group Inc. to assist in selling assets to aid in its restructuring. Lightbox has negotiated three asset purchase agreements to sell to independent, third-party purchasers: (a) two unprofitable store locations in Kelowna and Lake Country; and (b) the assets related to a now closed store location in Saskatoon. Despite the pending sales, the company has been unable to restructure so as to be in a position to meet its obligations as they come due, or to broker a sale of its operations en bloc as a going concern. However, such efforts have attracted interest in a restructuring transaction from a number of prospective parties, and the company intends to run a SISP in the CCAA proceedings to maximize value for stakeholders. EY is the monitor. Counsel is McMillan for the company, Fasken for the monitor, McCarthy Tétrault for Sundial Growers, Lawson Lundell for BMO and Alpine Retail Center, Dentons for Roseterra Investments, Daoust Vukovich for Pensionfund Realty, MLT Aikins for LS Properties Meadows Market BT and Cannavore Cannabis, Koffman Kalef for Robson Promenade Holdings, Gowlings for Aquanta Group and Forthspace Cannabis and Crabtree Law for 1204393 B.C. Ltd. By Dina Milivojevic

Trichome Financial Corp.

Trichome Financial Corp. and various subsidiaries, which cultivate, process and sell premium and ultra-premium cannabis in Canada through their licenced subsidiaries, obtained CCAA protection on November 7. Prior to June 2020, Trichome was a specialty finance company, providing capital solutions to the Canadian cannabis market. One of Trichome’s loans was to the JWC Group. In April 2020, the JWC Group was granted protection under the CCAA. In addition to being the JWC Group’s senior ranking lender, Trichome was the DIP lender in the CCAA proceedings. On June 2, 2020, the Court approved a transaction between the JWC Group and Trichome for the sale of substantially all of the JWC Group’s assets to Trichome. Since then, Trichome's business has been focused on the cultivation, processing and sale of premium cannabis from its premises located in Kitchener, Ontario. Trichome has grown its consolidated revenue to over $30 million for the twelve months ending June 30, 2022. However, the business has been impaired by persistent and increasing liquidity issues. Trichome is now facing a severe liquidity crisis and has accrued significant accounts payable (approximately $7.7 million), of which approximately $7.4 million is overdue, with a large portion owing to essential suppliers. Trichome is currently unable to purchase cannabis from third-party suppliers and fill purchase orders, which has resulted in lost revenue of approximately $2 million in the third quarter of 2022. KSV was appointed monitor. Counsel is Bennett Jones for Trichome, Cassels for the monitor and Dentons for Cortland Credit Lending Corporation, the DIP lender. By Dina Milivojevic

Cannapiece Group Inc. et al. (the “Cannapiece Group of Companies”)

Cannapiece Group Inc. et al. (the “Cannapiece Group of Companies”), obtained CCAA protection on November 3. Cannapiece Corp. (“CPC”), the wholly owned subsidiary, operates as a leading Canadian cannabis contract manufacturer, providing extraction, processing, and packaging services for its customers, which include large and industry-leading participants. CPC does not grow any flower and is strictly a business-to-business service provider. In the past year, CPC has seen its business suffer and losses grow due in part to substantial capital investments made to meet capacity requirements, a steep decline in the value of most publicly-traded cannabis companies in Canada (which form the basis of CPC’s client base), intense competition and significant price compression, and low market demand for cannabis products at the retail level, partially as a result of the illicit market for cannabis. Management has made efforts to address the financial challenges including by, among other things, significantly reducing staff, maximizing automation for efficiencies, increasing the efficiency of production staff and retaining consultants to assist in identifying opportunities to improve liquidity. Notwithstanding these steps, CPC projected net working capital deficits of approximately $3.5 million over the next 3 months, excluding servicing of CPC’s debt facilities. Absent the filing, and DIP financing, the Cannapiece Group of Companies would not have the liquidity required to fund its immediate operational needs, including payroll for employees, or to run a SISP. BDO was appointed as monitor. Counsel is Miller Thomson for the Cannapiece Group of Companies and Dentons for the Monitor. By Dina Milivojevic

Lightbox Enteprises Ltd. dba Dutch Love Cannabis

Lightbox Enteprises Ltd. dba Dutch Love Cannabis, a licensor and service provider with respect to the "Dutch Love" cannabis store brand, filed an NOI on November 1, listing approximately $16.4 million in liabilities, including approximately $6 million to George Melville Holdings, $3 million to Sundial Growers, approximately $2.3 million to DHM and $2 million to Milan Trpin. In May, the company unsuccessfully sought to enjoin a former franchisee from operating a competing business at two locations in Timmins and Brampton, Ontario, after the parties' business relationship fell apart. EY is the proposal trustee. Counsel is McMillan for the company. By Dina Milivojevic

The Hypoint Company Limited (“Hypoint”), a Toronto-based cannabis company, and 2618909 Ontario Limited (“909”)

The Hypoint Company Limited (“Hypoint”), a Toronto-based cannabis company, and 2618909 Ontario Limited (“909”), the owner of the cannabis production facility on which Hypoint conducted business, were placed in receivership on October 28. Canadian Equipment Finance and Leasing Inc. (“CEF”), which has a first-ranking security on the HVAC equipment installed on the premises, but not the premises themselves, brought the receivership application. The mortgagees, which have registered mortgage interests against title to the premises, did not oppose the appointment of a receiver over the HVAC equipment, but opposed the appointment of a receiver over the assets of 909 (the premises). A receiver was ultimately appointed over all of the assets of both companies, and msi Spergel (GRIP), the firm nominated by the mortgagees, was appointed receiver. Counsel is Reconstruct for the receiver, Lerners for Albert Gelman (the receiver proposed by CEF), Goldman Sloan Nash & Haber for CEF, Teplitsky Colson for Chantal Bock, Rothstein Law for the mortgagees and Fasken for Beverly Rockliffe. By Dina Milivojevic

2618909 Ontario Limited and The Hypoint Company Limited

The Hypoint Company Limited (“Hypoint”), a Toronto-based cannabis company, and 2618909 Ontario Limited (“909”), the owner of the cannabis production facility on which Hypoint conducted business, were placed in receivership on October 28. Canadian Equipment Finance and Leasing Inc. (“CEF”), which has a first-ranking security on the HVAC equipment installed on the premises, but not the premises themselves, brought the receivership application. The mortgagees, which have registered mortgage interests against title to the premises, did not oppose the appointment of a receiver over the HVAC equipment, but opposed the appointment of a receiver over the assets of 909 (the premises). A receiver was ultimately appointed over all of the assets of both companies, and msi Spergel (GRIP), the firm nominated by the mortgagees, was appointed receiver. Counsel is Reconstruct for the receiver, Lerners for Albert Gelman (the receiver proposed by CEF), Goldman Sloan Nash & Haber for CEF, Teplitsky Colson for Chantal Bock, Rothstein Law for the mortgagees and Fasken for Beverly Rockliffe. By Dina Milivojevic

The Flowr Corporation, The Flowr Canada Holdings ULC, The Flowr Group (Okanagan) Inc. and Terrace Global Inc. (the “Group”)

The Flowr Corporation, The Flowr Canada Holdings ULC, The Flowr Group (Okanagan) Inc. and Terrace Global Inc. (the "Group"), a group of companies specializing in the cultivation, processing, distribution, and sale of packaged dried cannabis flower, pre-roll and other cannabis products, obtained CCAA protection on October 20. While the Group is headquartered in Toronto, Ontario, it operates from leased premises located in Kelowna, British Columbia. The Group incurred significant operating losses in 2021 and the first six months of 2022 due to a mix of unfavourable factors, including over-supply in the market of cannabis products, price compression and the impact of the illicit market. The Group’s operating cash burn amounted to approximately $26.5 million during this 18-month period. To address these financial challenges, management have taken significant measures, including cost cutting and selling surplus or non-performing assets, in order to repay indebtedness and increase the Group’s liquidity. However, these efforts were insufficient to address the liquidity challenges facing the Group. EY was appointed monitor. Counsel is Miller Thomson for the Group, TGF for the monitor and Norton Rose for the DIP lender. By Dina Milivojevic

SugarBud Craft Growers Corp., Trichome Holdings Corp., and 1800905 Alberta Ltd.

SugarBud Craft Growers Corp., Trichome Holdings Corp., and 1800905 Alberta Ltd., a Stavely, Alberta-based group of companies in the cannabis business, had their NOI proceedings continued under the CCAA on October 18. The NOI filing was precipitated by a significant working capital deficit, which made the group unable to pay ongoing obligations as they become due, as well as a demand issued by Connect First Credit Union Ltd. ("CFCU"), the companies’ primary secured lender. The primary purpose for the CCAA conversion is to allow for more flexibility and time for the companies to restructure their affairs, including carrying out the SISP approved in the NOI. A&M was appointed monitor. Counsel is MLT Aikins for the companies, BDP for the monitor and Dentons for CFCU By Dina Milivojevic

CannTrust Holdings Inc.

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

Flower One Holdings Inc., FO Labour Management Ltd. and Flower One Corp. (collectively the “Companies”)

Flower One Holdings Inc., FO Labour Management Ltd. and Flower One Corp. (collectively the “Companies”), Nevada's largest licensed producer of cannabis with a registered office located in Vancouver, British Columbia, obtained CCAA protection on October 17. For the past few years, the Companies have experienced various challenges including, among other things: (1) production issues impacting both quality and quantity produced at the Companies' facilities; (2) margin compression caused by increased market competition and a lack of vertical integration; (3) significant debt service costs (with approximately $6 million due before the end of the year); and (4) corporate overhead costs, including the financial burden associated with being a publicly traded company. The Companies' financial challenges have been compounded by a significant reduction in product sales due to decreased tourism in Las Vegas as a result of the COVID-19 pandemic, which reduced demand. PwC was appointed Monitor. Counsel is Blakes for the Companies and McCarthy's for the Monitor. By Dina Milivojevic