The Cannabist Company has announced it is selling several of its cannabis operations across the United States and has entered a formal legal process to manage its debts and obligations.
The company has signed agreements to sell its cannabis businesses, covering growing, production, and retail, in two states. Its Ohio operations will be acquired by Holistic Industries Inc., while its Delaware business will be taken over by Parma Holdco LLC, a company linked to a Boston-based investment fund that focuses on the US cannabis sector. The company has also signed a non-binding letter of intent to sell operations in a further six states: Illinois, New Jersey, Colorado, Massachusetts, Maryland, and West Virginia.
The Cannabist Company has voluntarily entered creditor protection in Canada under the Companies' Creditors Arrangement Act (CCAA), overseen by the Ontario Superior Court of Justice. It also plans to file for recognition of this process in the United States under Chapter 15 of the US Bankruptcy Code. This step is designed to allow the company to complete its sales in an orderly way, protect its remaining cash, and wind down operations in states not included in any sale — most notably New York and Pennsylvania.
Holders of more than 60% of the company's secured debt, consisting of two series of senior notes due December 31, 2028, have formally agreed to support the sales and the legal proceedings.
The company's board previously set up a special committee of independent directors to review its strategic options. With the help of external financial and legal advisors, the committee looked at a range of possibilities, including mergers and asset sales. After an extensive review, and given ongoing financial and operational difficulties affecting both the company and the wider US cannabis industry, the committee concluded that this course of action represents the best available outcome for the company and those with a stake in it.
For more information:
The Cannabist Company
www.cannabistcompany.com
