A cannabis producer in Newfoundland has completed a purchase of cannabis from a BC producer as it deals with restructuring.
Atlantic Cultivation in St. John’s, Newfoundland, a cannabis producer that also operates retail stores in Newfoundland, recently completed a purchase of cannabis from Tantalus Labs, located in British Columbia, as well as control of the Tantalus brand.
The sale includes the transfer of 70,853 units of packaged and unstamped inventory, including dried flower, pre-rolls, and infused pre-rolls, and 33,919 units of seeds, as well as some equipment like trimming machines and fans.
Tantalus products will soon be available in Atlantic Cultivation’s retail stores in Newfoundland and Labrador.
“This acquisition is founded upon our shared values, reflecting our unwavering commitment,” said Chris Crosbie, the founder and COO of Atlantic Cultivation, in a press release. He went on to say that the deal reflects the two companies’ shared values. “We persist in our mission to elevate cannabis quality and ensure its widespread accessibility.”
The move was part of a sale approved by the court following Tantalus Labs’ recent announcement that it had given notice to its creditors and would be pursuing bankruptcy.
A court ruled in July that the sale could happen despite efforts by the CRA to destroy the products, as its excise licence was set to expire on July 10, 2023. Any sales of products would require an excise licence.
CRA told the court that on June 12, 2023, Tantalus had agreed to terms that would include seven monthly payments of $35,000 to begin June 30, in addition to its 11 ongoing payments for monthly excise taxes due, all pending notice of intent from Tantalus.
According to court records, the CRA agreement with Tantalus also stated that if the payments were not made on the agreed timeline, the CRA “may have to take legal action without further notice, including garnishing income, directing the sheriff to seize and sell assets, and use any other legal means to collect the amount due.”
Tantalus’ creditor, Sungrown Mortgage Corporation, had threatened to enforce its security against the property where Tantalus operates unless the latter agreed to several key points, including recognizing a debt of over $5.5 million owed to Sungrown as of June 28, 2023. Total debts for Tantalus were listed as over $14 million, including more than $4 million to the CRA. Tantalus’ total debts were listed as $14,023,083.82.
The property, including the 69,000 sq ft greenhouse with 38,000 sq/ft of growing space and a five-bedroom home, is currently listed for $5.56 million.
Tantalus said rushing the sale of its inventory of cannabis would force it to accept a lower price than if its excise licence was extended to allow it to pursue a more profitable deal.
Tantalus told the court it had approximately 345 kilograms of packaged inventory ready for sale, and 865 kilograms of bulk unpackaged cannabis inventory (trimmed and dried). The most recent court filings show that the remaining cannabis inventory as of July 25, 2023, consisted of 70,853 units of packaged and unstamped inventory, including dried flower, pre-rolls and infused pre-rolls, and 33,919 units of seeds.
A July filing shows Tantalus sold approximately 1,300 kilograms of bulk unpackaged cannabis inventory (trimmed and dried) to Atlantic. The sale proceeds were received on July 24, 2023, which court filings show to be for at least $1 million.