Zenabis Global, a subsidiary of Quebec-based licensed cannabis producer Hexo Corp., filed for creditor protection under Canada’s Companies’ Creditors Arrangement Act (CCAA) to restructure the business.
Hexo bought Zenabis only one year ago for 235 million Canadian dollars ($185 million) in stock – one of several recent acquisitions that ultimately pushed the Quebec business to the brink of bankruptcy.
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As reasons for the CCAA filing, Zenabis cited:
Margin pressures caused by the fragmentation of the overall cannabis industry. General operational and financial underperformance. Financial pressures resulting from debt.
The company said the initial court order is expected to provide a stay of creditor claims to give Zenabis time to explore a sale of assets.
“Zenabis Group has been unable to generate positive cash flows and it has consistently incurred cumulative losses,” according to a news release.
The company said it is no longer able to meet
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