The Cannabist Company is selling off assets as it heads toward bankruptcy.
The company and its subsidiaries have entered into two definitive agreements: one to sell its cannabis cultivating, producing, manufacturing and distributing assets in Ohio to Holistic Industries; and another to sell its cultivating, producing, manufacturing and distributing assets in Delaware to Parma Holdco, a Nevada limited liability company.
Cannabist said it has also entered into a non-binding memorandum of understanding for the sale of certain production, manufacturing, distribution and sale operations in Illinois, New Jersey, Colorado, Massachusetts, Maryland and West Virginia.
The large-scale offloading of assets comes as the company commences voluntary proceedings under the Companies' Creditors Arrangement Act (Canada) (CCAA) in the Ontario Superior Court of Justice. It also intends to commence proceedings under chapter 15 of the Bankruptcy Code in the United States Bankruptcy Court.
The commencement of the CCAA proceedings and entry into the strategic transactions represent the continuation of the previously announced strategic review process initiated by a special committee of the company's board of directors.
"With support from external financial and legal advisors, the special committee thoroughly evaluated a range of options including potential asset sales, mergers, or other strategic and financial transactions in light of persistent operational and financial challenges facing both the company and the broader industry," the company wrote. "Despite the company’s significant efforts to improve its performance, it became clear during the strategic review that the Strategic Transactions, and the CCAA Proceedings necessary to implement such transactions, are the best option available for The Cannabist Company and its stakeholders."
