Following the closing of Simply Solventless’ acquisition of Delta 9 Bio-Tech Inc. from Delta 9 Cannabis Inc. in February, some $13.8 million of the proceeds of this deal have been distributed to Delta 9’s largest creditor, SNDL Inc.
The Monitor’s ninth report, posted on April 14, also includes a request to approve the discharge of the Monitor and the termination of the CCAA Proceedings for ResidualCo and Delta 9 Logistics.
ResidualCo is the company named as controlling all of Delta 9’s excluded assets, excluded contracts, and excluded liabilities as part of the recent deal whereby Simply Solventless Concentrates Ltd. is to acquire all the issued and outstanding shares of the Winnipeg-based Delta 9 Bio-Tech.
The court will hear the discharge request on April 23.
On April 1, 2025, pursuant to the Reverse Vesting Order and Section 49 of the Bankruptcy and Insolvency Act (BIA), the Monitor assigned ResidualCo and Logistics into bankruptcy, something the CRA had unsuccessfully sought to block. The first meeting of creditors for both estates is on April 21, 2025.
As there are no remaining assets in ResidualCo or Logistics, the Trustee has advised the creditors that no recoveries are expected within the respective estates in the bankruptcy proceedings.
The ninth report also includes information on reviewing and discussing weekly payables with the company’s management, assigning ResidualCo and Logistics to bankruptcy on April 1, 2025, and updates on Delta 9’s finances, among other items.
The report also notes Delta 9 Group’s actual cash receipts and disbursements compared to its updated cash flow forecast, as presented in the eighth Monitor’s report, for the period from February 15, 2025, to March 4, 2025.
Delta 9 Group’s forecasted accounts receivable for government was $108,000, while the actual amount was $53,000. The accounts receivable for others was forecasted to be $333,000, compared to the actual amount of $303,000.
The company’s forecasted cannabis sales for the week ended March 4, 2025 were $3.3 million, while the actual was $2.7 million.
Over the reporting period, the Delta 9 Group experienced a positive cash flow variance of approximately $420,000.
The $13.1 million payment to SNDL was for the remaining obligations under the SNDL 1L Debt, meaning all obligations of the Delta 9 Group to SNDL have now been fully performed and discharged.
