Wayne Patrick Consumer Products Ltd. and WPCP Ltd., CCAA

Wayne Patrick Consumer Products Ltd. and WPCP Ltd., Hamilton, Ontario-based cannabis companies which produce and supply cannabis products across Ontario, Saskatchewan, Manitoba, Yukon, the Northwest Territories, Nunavut, Newfoundland and Québec, had their NOI proceedings continued under the CCAA on February 20.

Over the last six months, the companies have suffered losses due to, among other things: (a) significant turnover of key personnel; (b) increased enforcement activity by CRA with respect to the payment of excise taxes; (c) changing investor sentiment driving public investment away from the cannabis sector, forcing the companies to seek more expensive forms of financing; (d) higher interest rates leading to investors demanding increased rates of return in excess of what the companies are able to provide; (e) the decreased market demand for cannabis products at the retail level; and (f) intense competition and an over-supply of cannabis products leading to significant price compression and the sale of inventory at a loss.

The companies have made efforts to address these financial challenges by significantly reducing staff and purchasing cannabis wholesale rather than cultivating it, among other strategic decisions. However, they are facing a liquidity crisis and have determined that the best path forward is to pursue a court-approved SISP.

Grant Thornton is the monitor.

Counsel is Miller Thomson for the companies and Cassels for the monitor.

By: Dina Milivojevic