THC Biomed obtains initial CCAA protection as tax arrears, garnishments squeeze cannabis producer

THC Biomed Ltd., a Kelowna, British Columbia cannabis cultivator and processor, obtained initial protection under the Companies' Creditors Arrangement Act on April 21, 2026, following the company’s earlier notice of intention under the Bankruptcy and Insolvency Act filed just a few days earlier on April 17.

THC Biomed operates a fully licensed cannabis production facility at 2550 Acland Road in Kelowna. The site comprises 10 commercial units, with 7 leased and 3 owned by the company. It cultivates, processes, sells, and distributes cannabis products in Canada and certain international markets. The company employed 9 full-time staff at the time of filing, with many workers on reduced hours since January 2026 because of liquidity pressure.

Its business depends on two key regulatory approvals: a Health Canada cannabis licence and a CRA excise licence. The cannabis licence expires August 21, 2026. The excise licence has been renewed month to month since April 2024 and was then set to expire April 23, 2026.

Court materials say the insolvency stemmed from several overlapping pressures: oversupply and price compression in the cannabis market, capital demands tied to operations and product development, regulatory compliance costs, weak investor appetite for cannabis issuers, and CRA enforcement action that impaired liquidity.

As of the filing, the company reported about $3.35 million owed to CRA, including $2.6 million in excise tax, $448,000 in source deductions, and $297,000 in GST.

The monitor said CRA garnished bank accounts and issued requirements to pay directing customers to remit amounts otherwise payable to THC Biomed directly to CRA. The company said those measures left it with only about $287 cash as of April 13, 2026.

Landlord pressure also accelerated the filing. After the company missed rent due April 17, landlords advised on April 16 that they intended to lock THC Biomed out of the facility effective the next day. The company filed its NOI in order to avoid being evicted.

The company’s preliminary restructuring plan is to stabilize operations, redirect cash otherwise caught by CRA enforcement, refinance or sell some or all of its owned units, negotiate CRA arrears, and eventually present a compromise plan to affected creditors. DIP financing is being provided by 2011329 Alberta Ltd.

MNP is the monitor. Counsel is MLT Aikins for THC Biomed and Fasken for the monitor.