Nova Scotia-based cannabis producer Mernova Medicinal Inc. and its parent company, Creso Canada Limited, received CCAA protection on April 16.

Cresco is owned by Melodiol Global Health Limited, an Australian corporation which initiated voluntary administration proceedings in December 2024. (h/t Insolvency Insider)

Minerva employs 40 people and sells cannabis under the brand Ritual Green in several provincial markets. 

In an April 10 pre-filing report of the proposed Monitor, it is estimated that Minerva and Cresco Canada owe the Canada Revenue Agency $1.6 million in unremitted HST and excise tax, as well as $3 million to unsecured creditors and $9.6 million to secured creditors, for a total of $14.2 million in estimated creditors. It also lists another $16.7 million owed internally to Cresco. 

The proposed Monitor also notes that Mernova previously agreed to a payment plan with the Canada Revenue Agency (CRA) regarding the outstanding historical HST and unremitted excise taxes, under which Mernova was to pay $63,000 per month for excise tax and $14,000 per month for GST/HST. 

The proposed monitor report also states that Mernova has been unable to service payments for the historical balances owing to the CRA since January 2025, with the company under the belief that, should the Court grant their request for an initial CCAA order, payments for historical balances would cease and be subject to a stay period. 

Grant Thornton is the monitor. There can be no proceedings against the companies until the April 25th stay period has expired. 

Projected receipts from cannabis revenues for the weeks of April 7 through July 6, 2025, are $2.3 million, as are its estimated operating disbursements.

Mernova says it has faced significant financial challenges due to increased competition, low margins, oversupply, high excise taxes, and the ongoing presence of the illicit market, among other factors.

The filing was prompted by Mernova and Cresco’s two main creditors, La Plata Capital LLC (owed $6.6 million) and Briant Nominees Pty Ltd. (owed $2.9 million), issuing demands under their respective loan agreements. The two creditors are supportive of the companies conducting a Sale and Investment Solicitation Process (SISP) as part of a CCAA process, for the purpose of maximizing recovery for their stakeholders. 

The application is to be heard on April 16, 2025, at 9:30 am at the Law Courts, 1815 Upper Water Street, Halifax, Nova Scotia.

Mernova’s creditor listing as of April 16, 2025, can be found here.