Jul 27, 2023
By Jeremy Logan
A British Columbia Supreme Court judge is allowing a bankrupt cannabis company to sell off over 1,200 kilograms of inventory to avoid a threat by the Canada Revenue Agency to destroy the product.
In a ruling out this week, the court gave the nod for a so-called fire sale of Maple Ridge, B.C.-based Tantalus Labs’ remaining inventory of cannabis after the company entered insolvency proceedings in June.
The company had to lay off more than 50 employees at its main facility, owing millions to its primary lender and millions more for unpaid excise taxes.
Working with insolvency trustee Ernst and Young, the company requested that the court approve the sale under a looming threat by the CRA to enter its premises on July 10th, to destroy the product upon the expiry of its excise tax licence.
The tax agency had refused to renew the company’s licence due to its bleak financial situation, but Tantalus Labs and the trustee sought more time to conduct a sale of the remaining cannabis flower.
The B.C. court let the sale to go through earlier this month, and Tantalus CEO Dan Sutton says several Canadian cannabis companies are in financial trouble due to what he called an extremely burdensome taxation and regulatory environment.