BC-based cannabis processor Tricanna Industries Inc. filed a Notice of Intention (NOI) on February 5, listing $3.2 million in liabilities, including $1.1 million owed to the Canada Revenue Agency and $31,408.26 in GST.
The company lists $2.9 million in unsecured debt and $1.7 million in secured debt, for a total of more than $4.6 million.
Since filing the NOI, the company says it has continued its normal operations and intends to continue to carry on business with its suppliers on terms which are acceptable to Tricanna, its suppliers, and regulatory bodies.
As a result of filing the NOI, all proceedings against Tricanna and its assets were automatically stayed until March 6, 2025, which may be extended by further Court approval.
Tricanna offered semi-automated pre-roll production, packaging for cannabis products, trimming, and distribution services for cannabis cultivators and other producers. The company operated from a leased production facility in Mission, British Columbia. The facility is owned by a separate holding company and is not subject to these proceedings.
In its first report to its creditors, the company reported net losses for the year ended December 31, 2024, and further reported that the Canada Revenue Agency (CRA) informed Tricanna that it may initiate action against the company with respect to the outstanding balance owed to the CRA for excise tax.
The actions threatened by the CRA included freezing bank accounts, as well as suspending or not approving a renewal of Tricanna’s excise tax license, a move the CRA has used against other companies in recent years. Without this licence, a company cannot operate in the cannabis industry.
As a result of what Tricanna says are significant operating losses and the pending action from CRA, the company’s Management decided to seek creditor protection to permit a restructuring of Tricanna’s financial affairs.
Tricanna’s management filed the Notice of Intention to Make a Proposal (NOI) pursuant to the provisions of the Bankruptcy and Insolvency Act on February 5, 2025, and MNP Ltd. consented to act as Licensed Insolvency Trustee in the proposal proceedings.
The company is currently seeking to extend the deadline to file a proposal until April 20, 2025, as well as the approval of a Reverse Vesting Order (RVO) to vest all of the company’s excluded assets, excluded contracts and excluded liabilities.
The subscription agreement includes that a portion of the secured liabilities owing to investors Victor Neufeld, Gary Leong and Thomas Tardi will be retained by the company as documented by a non-interest bearing, demand promissory note and will be satisfied from the Subscription price upon closing. Neufeld is a retired executive from Aphria Inc., while Leong was previously the chief scientific officer at Aphria, along with several other subsequent cannabis industry positions.
The subscription agreement also includes that in the event that a balance is owed to Community Savings Credit Union, it would also be retained by the company.
In the weeks leading to Tricanna’s NOI, the company underwent an informal sales process, contacting various parties to solicit an offer to purchase the company. Tricanna approached parties that its directors believed could benefit from acquiring Tricanna and had sufficient cash reserves to be able to close a transaction quickly.
Several parties engaged in the informal sales process did not present offers, citing concerns with Tricanna’s “limited working capital” and the company’s requirement to close a transaction quickly.
Another party was approached by Tricanna, but they did not proceed with an offer as the prospective purchaser lacked experience in the cannabis industry.
Tricanna continues to employ four full-time employees, which it intends to retain, with one employee’s hours being reduced.
The federal excise arrears include an additional $280,042.02, which relates to excise duties that were assessed against a significant amount of cannabis inventory that was stolen from Tricanna’s premises on September 1, 2023.
In an affidavit, the president and director of Tricanna, Dayna Lange, says the insurance proceeds did not compensate Tricanna for the excise duties on the stolen inventory.
Tricanna says it has recorded operating losses since its June 18, 2018 incorporation.
On February 2, 2025, Tricanna entered into a subscription agreement with Fabrizio Rossi, the CEO of cannabis company the Trygg Collective, reflecting a renegotiated offer that is intended to close by way of an RVO.
Tricanna was first licensed by Health Canada in 2020.
