Less than two years after constructing an 18,000-square-foot facility in Lumby, a North Okanagan-based cannabis company now finds itself in the middle of bankruptcy proceedings.
In a Monday, Oct. 5 press release, True Leaf Cannabis Brands Inc. updated shareholders on its recent efforts to exit bankruptcy.
The company’s three subsidiaries — True Leaf, True Leaf Cannabis Inc. and True Leaf Investments Corp. — filed proposals to creditors with the Office of Superintendent in Bankruptcy Canada between Sept. 23 and Oct. 2.
The purpose of the proposals is to allow Canguard Mortgage Investment Corporation to “acquire the assets and the shares of the companies and allow for the companies to emerge from their respective proposal proceedings,” the press release states.
The True Leaf Campus in Lumby was designed to cultivate, process and sell cannabis, and the company obtained Health Canada licences to do so in November 2019.
True Leaf is under a temporary management cease trade order, which it requested from the B.C. Securities Commission after missing the Sept. 14 deadline for filing its audited financial statements. The company says it is working with its auditor to complete its annual filings.
True Leaf’s CEO and CFO are prevented from trading shares in the company for as long as the cease trade order remains in effect.
The company has cited the COVID-19 pandemic and internal reorganizations as reasons for missing the deadline.
“Both events have impacted the company’s ability to complete its audited annual financial statements and has consequently caused a delay in completion of the annual filings,” a Sept. 15 company press release reads.
The company’s efforts to restructure and refinance debt include selling its pet supplement business, True Leaf Pet Inc., in a deal announced in late August.