Court again extends stay for 420 Premium Markets, rejects High Park’s SISP bid

March 31, 2025 | Sarah Clark

An Alberta court has again extended the stay for 420 Premium Markets Ltd. and its associated companies as part of its CCAA proceedings, this time to Friday, May 23, 2025.

The court has also rejected High Park’s argument for a Joint Bid SISP instead of 420’s proposed plan of compromise and arrangement, denying High Park the right to vote on the Proposed Plan at an upcoming Creditors’ Meeting.

The court also approved an application from 420 seeking an order permitting the filing of the Proposed Plan and calling the Creditors’ Meeting.

The companies 420 Premium Markets Ltd., 420 Investments Ltd., and Green Rock Cannabis Ltd (GRC). (collectively “420 Parent”), filed the notices of intent following a $9.8 million judgment against 420 for repayment of a bridge loan and related interest and costs to Tilray subsidiary High Park Shops Inc. High Park was created for the purpose of the acquisition of Four20.

Tilray had initiated litigation against 420 after a failed attempt by Tilray to purchase 420 for approximately $110 million in 2019.

At the time, Four20 had six licensed cannabis retail locations and another 16 locations secured in Alberta. The retailer currently lists 35 locations in Alberta and Ontario.

Four20 then filed a statement of claim against Tilray in 2020 in an Alberta court for $110 million plus $20 million in damages after Tilray chose to end its deal to buy the retailer, with Four20 saying the BC-based cannabis producer had not acted in good faith.

High Park participated in a sale and investment solicitation process (SISP), saying it made an offer to 420 Parent, which could have been pursued by the 420 in combination with any bid for their operating assets by another party.

High Park also partnered with cannabis retailer One Plant Corp, and together, they prepared and submitted a Letter of Intent (LOI) in Phase 1. On November 22, 2024, 420’s Monitor confirmed that High Park and One Plant were deemed qualified bidders for Phase 2 of the SISP, jointly, in respect of their joint LOI, and High Park alone, in respect of its individual bid.

Despite arguing that they were operating in good faith, High Park received a letter from the Monitor on January 7, 2025, confirming the Joint Bid was a Phase 2 Qualifying Bid but that the Applicants had advised that no bid would be selected in the SISP. The Applicants had elected to advance a plan of arrangement “intended to provide realizations to creditors that are [in] excess of any potential realizations creditors may receive by advancing a Phase 2 Qualified Bid”.

Court documents say that, according to High Park, this was the first time that High Park was informed that a plan of arrangement was substantially ready for acceptance.

On the other side of the debate, 420’s monitor argued that the Joint Bid from One Plant and High Park was not the best bid “as it not only did not offer full cash payout to unsecured creditors as High Park claims it does, but it also did not offer the best cash payout to unsecured creditors out of the bids received. Further, according to the Applicants, it did not appear that Stoke, 420 OpCo’s secured creditor, would receive any payment under the Joint Bid.”

On October 2, 2024, a court granted an order (SISP Order), approving a sale and investment solicitation process (SISP). The SISP did not result in a sale transaction.

The parent companies of cannabis retail chain Four20 Premium Markets first filed a notice of intent to make a proposal under the Bankruptcy and Insolvency Act in May 2024.

The companies 420 Premium Markets Ltd., 420 Investments Ltd., and Green Rock Cannabis Ltd (GRC)., filed the notices of intent following a $9.8 million judgment against 420 for repayment of a bridge loan and related interest and costs to Tilray subsidiary High Park Shops Inc. High Park was created for the purpose of the acquisition of Four20.

Tilray had initiated litigation against 420 after a failed attempt by the former to purchase 420 for approximately $110 million in 2019.

Pursuant to an Arrangement Agreement dated August 28, 2019 (Arrangement Agreement), Tilray and High Park agreed to acquire 420 Parent for $70 million plus a potential additional $44 million in contingent consideration.

On January 28, 2020, and February 4, 2020, Tilray and High Park provided 420 Parent with notices of alleged breaches of the Arrangement Agreement, which 420 Parent rejected because Tilray and High Park had not particularized the alleged breaches.

In the reasons for the decision of the Honourable Justice M.H. Bourque posted on March 27, the court noted that a previous decision from a Justice Feasby found that repayment of a bridge loan is not currently enforceable by High Park against 420 Parent because its repayment is contingent on whether termination of an Arrangement Agreement has occurred.

High Park has appealed the Feasby Decision. The Court of Appeal has scheduled the hearing of High Park’s appeal for April 17, 2025.

In the March 27 ruling, Justice Bourque rejected High Park’s argument for a previous Joint Bid for Phase 2 of an SISP (stalking horse) deal.

Although High Park argued that the Joint Bid immediately puts more money into the Applicants’ creditors’ hands than does the Proposed Plan; the court found the bid served High Park’s interests more than 420’s.