Green Relief, a Hamilton, Ontario-based cannabis producer, filed an NOI on March 11, listing approximately $9.7 million in liabilities, including $1.0 million to Cannoleum and $1.9 million to Schilthuis Construction. In early 2019, the company's co-founder and CEO stepped down, and a subsequent forensic investigation initiated by new management revealed that over $14.0 million had allegedly been misappropriated, and the company is now facing a severe liquidity crisis. PwC is the proposal trustee. Counsel is TGF for the company and DLA Piper for the proposal trustee.
Eureka 93 (CSE:ERKA), an Ottawa, Ontario-based cannabis company that operates one of the largest hemp cultivation and CBD extraction operations in North America, along with its subsidiaries - Artiva, LiveWell Foods Canada, and Vitality CBD Natural Health Products (collectively, the "Group") - filed an NOI on February 14, listing approximately $28.2 million in liabilities. At the end of December 2017, Artiva, Eureka 93's only operating company, acquired a large vegetable farm that it intended to retrofit for the cultivation, processing, and distribution of cannabis, but it has run out of cash and cannot complete construction. Believing that its business will become viable once construction is complete and production begins, the company filed for creditor protection in order to, among other things, obtain interim financing and simplify its capital structure. Deloitte is the proposal trustee. Counsel is Gowling WLG for the Group, Blaney McMurtry for the proposal trustee and Bennett Jones for a group of secured noteholders.
Invictus MD Strategies (TSX-V: GENE), a Vancouver, British Columbia-based cannabis company, along with certain other related companies, obtained protection under the CCAA on February 13. Several factors contributed to the company's liquidity issues. First, it was unsuccessful in obtaining additional financing to complete a custom-built cultivation facility. Second, the strains of cannabis that are currently being harvested by Acreage - the company's primary operating entity - are not in demand as they do not have sufficient potency. While Acreage is currently in the process of changing over its plants to those with a higher level of potency, these plants will not be ready to harvest until mid-April 2020. Finally, the company's revenues have decreased due, in part, to lower consumer demand and market saturation. The company currently owes approximately $10.6 million to ATB Financial and $5.3 million to Authentic Brands, a New York-based brand management company. PwC was appointed monitor. Counsel is Cassels for the company, BLG for the monitor and Blakes for ATB.
Wayland Group (CSE: WAYL), an Oakville, Ontario-based licensed cannabis producer, obtained protection under the CCAA on December 2. Cash flow negative from its operations since inception, the company has relied on equity and debt financing for funding. The company is in the process of expanding its flagship production facility in Langston, Ontario, but requires additional funding, which has proven extremely challenging to obtain. A cease trade order was issued in May 2019 as result of the company's failure to file its 2018 audited financial statements, and as such, the company cannot raise further funds from the issuance of securities. Without audited financial statements, it has also proven difficult to raise debt financing. Efforts have been made over the past 18 months to monetize the company's assets outside of an insolvency proceeding, but these have been unsuccessful. While under creditor protection, the company will look to complete a restructuring - either through a plan of arrangement or compromise or through a sale of its assets. PwC is the monitor. Counsel is Osler for the company, Bennett Jones for the monitor, Cassels Brock for secured lender Cryptologic and Goodmans for the company's debenture holders.
AgMedica, a Chatham, Ontario-based licensed cannabis producer, obtained protection under the CCAA on December 2. In anticipation of a potential IPO, the company devoted significant amounts of capital to expansion efforts in order to keep pace with other licensed producers in a highly competitive and capital intensive industry. As a result of changing market sentiments towards the cannabis industry, however, the IPO did not transpire. As an alternative, the company was in talks to secure a substantial debt financing package, but the potential lender also backed away. With no liquidity to fund ongoing operations, the company will look to run a sales and investment solicitation process while under creditor protection. EY is the monitor. Counsel is TGF for the company, McCarthy Tétrault for the monitor, Foglers for DIP lender Hillmount Capital and BLG for Stabilis.
DionyMed Brands (CSE: DYME), a Vancouver, British Columbia-based cannabis company, was placed in receivership on October 29 on application by GLAS Americas, owed, together with certain other lenders, approximately $24.8 million. The company generated its revenue primarily in the United States, selling a portfolio of wholly-owned and third-party brands to over 800 retail dispensaries in California, Oregon and Nevada, as well as providing a direct-to-consumer cannabis delivery service. Despite strong growth, the company was unprofitable; in the first 6 months of the year it recorded a negative operating cash flow of $17.2 million on $34.4 million of revenue. Efforts in recent months to raise additional capital were unsuccessful and the company's secured lenders were unwilling to provide additional funds without a court-supervised process geared to obtaining a permanent solution to the company's capital structure and indebtedness. FTI was appointed receiver. Counsel is Dentons for the applicant, Bennett Jones for the receiver, Stikeman Elliott for SP1 Credit Fund and Blakes for an ad hoc group of bondholders.
Curative Cannabis, an early stage cannabis cultivation company that is in the process of building a facility in Chatham, Ontario, was placed in receivership on September 19 on application by Auxly Cannabis Group, owed approximately $16.2 million. The company's facility is approximately 90% complete and it has submitted its application for a cultivation license. The company's loan from Auxly, which was used to finance the acquisition of the Chatham land and the construction of the facility, matured in August 2019 and the company has been unable to refinance the loan or otherwise put forward a proposal acceptable to Auxly. Farber was appointed receiver. Counsel is Bennett Jones for the applicant and Siskinds for the company.
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.