Entourage Health enters CCAA for cannabis wind-down and sale process

Entourage Health Corp. and six related companies obtained protection under the Companies’ Creditors Arrangement Act on June 17, 2026, on application by their primary secured lender, 2437653 Ontario Inc. (the “LPF Lender”), an affiliate of the LiUNA Pension Fund of Central and Eastern Canada, owed approximately $240.1 million. The proceeding is intended to support an orderly liquidation while preserving the possibility of a going-concern sale of Entourage’s medical cannabis business and other marketable assets.

The Entourage group comprises Entourage Health, Entourage Brands Corp., 2686912 Ontario Limited, 2686913 Ontario Limited, Starseed Holdings Inc., North Star Wellness Inc. and CannTX Life Sciences Inc. The business began operating under the WeedMD name in April 2017 and acquired Starseed on December 23, 2019.

Entourage processes and distributes medical and adult-use cannabis from a 26,000 square foot extraction and processing facility in Aylmer, Ontario, its only owned real property. Its recreational brands include Color Cannabis, Dime Bag and Saturday Cannabis, while its medical products are distributed under the Starseed brand. Starseed developed a relationship with locals of the Labourers’ International Union of North America under which members could obtain medical cannabis through their benefit plans.

LiUNA Pension Fund of Central and Eastern Canada (LPF) became Entourage’s principal financial stakeholder through a series of debt and equity investments. Its lending affiliate initially invested $25 million in Entourage Health in December 2019, later advanced a $30 million subordinated loan and acquired the group’s senior debt from Bank of Montreal on June 16, 2023. A related LPF entity acquired all outstanding Entourage Health shares on April 4, 2025 for $0.005 per share, leaving LPF affiliates as both the group’s senior secured creditor and ultimate indirect owner.

As of May 15, Entourage owed the applicant $19.2 million under its senior facility and $220.9 million under its subordinated facility. The senior facility matured on June 30, 2024. The subordinated facility originally matured on August 15, 2022, was extended to December 31, 2024 and was converted into a demand facility around March 30, 2026. Entourage had made no debt payments after May 15, and interest continued to accrue.

The companies said they had consistently operated at a loss and failed to establish a viable path to profitability. Expected expansion of the Starseed medical platform among additional LiUNA locals did not occur, while changes to several benefit plans reduced medical cannabis sales. Entourage’s adult-use business also remained unprofitable in a highly competitive market.

The LPF Lender continued advancing funds, extended maturities and capitalized unpaid interest, causing the secured debt to grow substantially. It eventually declined to finance further operating losses beyond the amounts needed to conduct the insolvency process.

Management began approaching potential purchasers before the filing, but no executable transaction emerged. Interest centred primarily on the medical business, with limited demand for the recreational operations. Entourage stopped producing new adult-use inventory and terminated 53 employees on June 8, including 40 in the Aylmer area. Approximately 22 employees remained as of June 25.

The applicant demanded repayment and delivered notices of intention to enforce its security on June 10. The companies consented to immediate enforcement on June 15 but continued limited operations because regulated cannabis inventory must remain under the possession and control of a licensed entity.

The purpose of the CCAA proceedings is to conduct a SISP, seek approval of a successful transaction, or wind down the companies’ operations. The LPF Lender is providing a DIP loan.

EY is the monitor. Counsel is Goodmans for the LPF Lender, Dentons and Mintz for the Entourage companies, and Fasken for the monitor.