Financially distressed Canadian cannabis company Aleafia Health has entered creditor protection, shortly after the failure of its attempt to merge with U.S. multistate marijuana operator Red White & Bloom Brands.
The initial creditor protection order, granted by an Ontario court under Canada’s Companies’ Creditors Arrangement Act (CCAA), affects Aleafia and “certain of its Canadian subsidiaries,” including Emblem Cannabis and Canabo Medical Corp., according to a Tuesday news release.
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Aleafia and Red White & Bloom (RWB) announced July 14 it had called off the proposed merger after some holders of Aleafia debt declined to accept the terms of a proposed settlement.
RWB is funding Aleafia’s CCAA proceedings via a debtor-in-possession (DIP) loan worth 6.6 million Canadian dollars ($5 million).
“The stay of proceedings and DIP financing will provide the Aleafia Group with the time and stability required to consider potential restructuring transactions and maximize the value
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