Cannabis Industry

While Canada still works through the kinks of a new system when it comes to cannabis, there have been enough obstacles to put several cannabis companies in jeopardy. Even bigger companies, including Wayland and AgMedica, both of whom initially looked to be doing well, have filed for protection against their creditors.


Part of the issue has not come from a lack of demand for products, but instead the stiff regulations from Health Canada that have made it difficult for businesses to fully obtain the required licensing. The design of the Cannabis Act was completely from a public health and safety viewpoint, which is admirable, but the regulations have made it difficult for the industry to really boom, as had been anticipated. Companies who had borrowed money from creditors on the assumption that the business would explode now find themselves deeply in debt and unprepared with how to proceed effectively.


One solution, in this case, is that the creditors themselves can be more sensitive to the uniqueness of the situation. These are not people running up credit card bills with frivolous spending. These are companies that are trying to navigate the challenges of a completely uncharted business model. It is taking more time to get the ball rolling, and payback is happening slower. Yet, really, the challenges are not the fault of the creditors. It might be time for Health Canada to re-evaluate some of the measures that they have put in place and see how the red tape might be better managed.

~Source: Navigating Uncertainty: Restructuring and Insolvency in the Cannabis Sector

  Posted: Tuesday, February 11th, 1:00pm 15 days ago

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