Delta 9 receives stay of proceedings extension

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This article was published 26/07/2024 (433 days ago), so information in it may no longer be current.

Delta 9 Cannabis Inc. and its subsidiaries have received court approval to extend a stay of proceedings until Sept. 15 for its creditor protection process.

The end result of the undertaking will effectively see the Winnipeg cannabis company sell off its chain of 41 retail cannabis stores to Toronto-based Fika Herbal Goods.

In exchange, Fika has provided the legal representations to pay off about $40 million of Delta 9’s debt to Calgary-based SNDL Inc., another cannabis retailer.

SNDL had issued demand notices on the debt after Delta 9 — Manitoba’s largest player in the sector, producing medical and recreational cannabis, with wholesale and retail sales channels — had breached its covenant.

Delta 9’s cannabis production operations are not part of the arrangement with Fika and the court-appointed monitor, Alvarez & Marsal, will embark on a sales and solicitation process to find a buyer for those assets.

Fika will provide financing to maintain operations of the company as a going concern as the legal proceeding unfold.

A claims process for unsecured creditors has been established through Alvarez & Marsal.

Fika, founded in 2020, has 144 retail stores under a variety of brands including Fika Cannabis, Friendly Stranger and Fire & Flower. On its website, Fire & Flower lists six locations in Manitoba: three stores in Winnipeg, and one store each in Portage la Prairie, Selkirk and Swan River.

— Free Press staff