Freedom Cannabis, CCAA

Freedom Cannabis, an Acheson, Alberta-based cannabis company, obtained CCAA protection on August 8.

Freedom has about 97 employees and operates out of a leased indoor processing facility. It is currently in default of the lease and owes approximately $2.4 million to landlord Star Prebuilt Homes.

The company has experienced significant net losses, has negative equity value and a negative cash balance. It owes approximately $17.3 million to senior secured creditor JL Legacy, approximately $9.5 million in excise tax arrears and approximately $3.9 million in unsecured debt to shareholders JohnFrank Potestio and Julie Potestio.

The company cites the highly regulated and saturated nature of the cannabis market, the complex and administrative-heavy regulatory and licensing regime, the increased excise taxation burden, alongside competition from the illicit market as contributing to its financial difficulties.

JL Legacy has agreed to provide a DIP loan in the CCAA proceedings.

KPMG is the monitor.

Counsel is Chaitons for the company, Sharek Logan & Van Leenen as litigation counsel for the company, Blakes for the monitor, McLennan Ross for JL Legacy, Stewart McKelvey for Nitrotin, Bryan & Company for Arpi’s North and Dentons for Star Prebuilt Homes.