314 Pure Cannabis Ltd., a licensed cannabis producer based in Crossfield, Alberta, is looking for a potential buyer after being placed under receivership by the Court of King’s Bench of Alberta. The company, which operates a 21,700 sq. ft. cultivation and hydroponic growing facility on a 3-acre lot, has been struggling with financial and operational challenges since its inception in 2019.
The court order, issued on January 11, 2024, appointed Harris & Partners Inc. as the receiver of all the assets, undertakings, and properties of 314 Pure Cannabis. The receiver is responsible for managing the company’s affairs, preserving its assets, and conducting a sales process to find a suitable purchaser.
The sales process launched to attract interested parties
On February 9, 2024, the receiver commenced a sales process to solicit offers from qualified bidders who wished to acquire the company or its assets. The sales process is being conducted by the procedures, which can be found on the receiver’s website.
Interested parties who want to participate in the sales process and receive additional diligence materials are required to execute a confidentiality agreement, which can be obtained by contacting Avison Young, the exclusive agent for the receiver. The deadline for submitting non-binding letters of intent is March 15, 2024, at 5:00 p.m. (Calgary Time).
314 Pure Cannabis aims to produce premium cannabis products
314 Pure Cannabis was founded with the vision of using sustainable methods to produce small batches of premium cannabis products for the Canadian market. The company sells its products under its consumer brand Poolboy, which offers a range of dried flowers, pre-rolls, and oils.
The company’s facility, located in Crossfield, a town about 50 km north of Calgary, is equipped with cutting-edge grow rooms, automated irrigation systems, and advanced climate control technology. The facility also has the potential to expand to 42,500 sq. ft. on the adjacent 12.61 acres of land owned by the company.
314 Pure Cannabis owns the facility and related production equipment, as well as the licenses and authorizations from Health Canada to cultivate, process, and sell cannabis for medical and recreational purposes.
The cannabis industry faces oversupply and competition
The cannabis industry in Canada has been facing several challenges in recent years, such as oversupply, price erosion, regulatory uncertainty, and fierce competition from both legal and illegal markets. Many cannabis producers have been forced to cut costs, lay off staff, or shut down operations due to financial difficulties.
According to a report by Brightfield Group, a cannabis market research firm, the Canadian cannabis market is expected to grow by 15% in 2024, reaching $3.6 billion in sales. However, the report also warns that the market is still oversaturated and that consolidation and restructuring are inevitable.
The report suggests that cannabis producers who want to survive and thrive in the industry need to focus on product differentiation, innovation, and branding, as well as expanding into new markets and segments.