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  Cannabis  Heritage Cannabis Seeks Creditor Protection
CannabisNews

Heritage Cannabis Seeks Creditor Protection

Lars BeckersLars Beckers—April 3, 20240
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Heritage Cannabis Holdings Corp. (CSE: CANN) (OTCQX: HERTF) announced today that the company and its subsidiaries have sought and obtained an order for creditor protection from the Ontario Superior Court of Justice under the Companies’ Creditors Arrangement Act (CCAA). This move comes after careful consideration of the company’s financial position and extensive consultation with legal and financial advisors.

Cannabis

 

The Decision and Background

Heritage Cannabis Holdings Corp., known for its cannabis brands like RAD, Purefarma, Premium 5, Pura Vida, and Dank Drops, faced a difficult decision. The company initiated CCAA proceedings in response to a demand for payment from its senior secured lender, BJK Holdings Ltd. The lender requested full payment of certain indebtedness, totaling $8.4 million, excluding legal fees.

In October 2023, Heritage entered into binding agreements to sell its real estate properties in Ontario and British Columbia (formerly Cannacure and Voyage Cannabis locations) to BJK Developments Ltd. The net purchase price was $9.7 million, to offset the amount owed to BJK Holdings. This move would have reduced the company’s remaining term debt by approximately 64% to just under $5.3 million1.

The Initial Order and Next Steps

The initial order for creditor protection includes a stay of proceedings in favor of Heritage and its Canadian subsidiaries. KPMG Inc. has been appointed as the monitor of the company during the CCAA proceedings. The board of directors remains in place, and management continues to oversee day-to-day operations under the monitor’s supervision.

Heritage Cannabis plans to seek approval for a sale and investment solicitation process (SISP). If approved, interested parties can participate by SISP procedures. Further details about the SISP will be disclosed in due course.

Listing and Delisting

The company expects the Canadian Securities Exchange (CSE) to place Heritage under delisting review. The outcome of this review and the company’s continued qualification for listing on the CSE remain uncertain.

Conclusion

Heritage Cannabis Holdings Corp. faces a pivotal moment as it navigates creditor protection proceedings. The company’s commitment to transparency and its efforts to explore viable alternatives underscore the challenges faced by businesses in the cannabis industry. As the situation unfolds, stakeholders and investors await further developments.

 

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Lars Beckers

Lars Beckers is a distinguished senior content writer at MMJ Gazette, bringing a wealth of experience and expertise to the realm of medical marijuana and cannabis-related content. With a deep understanding of the industry and a passion for sharing knowledge, Lars's articles offer readers comprehensive insights and engaging narratives in the dynamic world of cannabis. Known for his meticulous research, clarity of expression, and commitment to delivering high-quality content, Lars brings a seasoned perspective to his work, educating and informing audiences on the latest trends and developments in the field.

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