CannMart Labs Inc., CCAA

CannMart Labs Inc., a Toronto, Ontario-based cannabis company specializing in the production and distribution of butane hash oil extracts, had its NOI proceedings continued under the CCAA on May 2.

The company is a wholly-owned subsidiary of Lifeist Wellness Inc. (TSXV: LFST). Prior to the NOI proceedings, and while it was still operating, CannMart Labs’ disbursements exceeded its receipts by approximately $600,000 per month.

In February, Lifeist announced plans to sell all of its shares of the CannMart Group to a British Columbia company affiliated with Tierra Corp. for $5 million. However, that proposed sale was rejected by Lifeist’s shareholders in a meeting in March, and the company’s board stated that it would explore alternatives to restructure the CannMart Group.

Despite reducing costs by suspending operations, CannMart Labs continued to lack the liquidity required to implement its restructuring strategy and Lifeist refused to continue funding CannMart Labs absent the insolvency proceedings.

The purpose of the CCAA conversion is to conduct a SISP and, if value remains for unsecured creditors, to conduct a claims process in order to develop a plan.

msi Spergel Inc. is the monitor.

Counsel is TGF for CannMart Labs and Reconstruct for the monitor.

By: Dina Milivojevic