Wilting Flowr files for creditor protection, seeks $2M loan
Published on October 20, 2022 by David Wylie
The Flowr Corporation is filing for creditor protection.
The Kelowna-based cannabis producer has been suffering for some time, with deep staff cuts, sale of assets, and resignations from its leadership team, including the C-suite and board of directors.
Flowr’s application Thursday to the Ontario Superior Court of Justice under the Companies’ Creditors Arrangement Act would provide protection for all of Flowr’s subsidiaries—including Terrace Global, which Flowr acquired in 2020 for $63 million.
“After careful consideration of all available alternatives following thorough consultation with legal and financial advisors, the directors of the company have determined that it is in the best interests of the Flowr Group to file an application for creditor protection under the CCAA,” says a statement from Flowr.
Exodus from The Flowr Corporation
Two directors left Flowr in the past few weeks, including Stephen Arbib and Joanne Lee.
In August, the company hired the former head of Nova Cannabis as CEO. He replaced interim CEO Tom Flow (the founder), who took over when Darryl Brooker quit less than a year after taking on the role.
Brooker was previously president at Mission Hill Family Estate and he pivoted back into the wine industry.
Karasiuk is the ex-Nova Cannabis CEO and former CCO at Aurora Cannabis.
“With a renewed focus on leveraging the Company’s core assets and addressing markets it’s best capable of competing and winning in, I’m excited about what Flowr, its team of committed professionals and highly-engaged board will be able to achieve,” said Karasiuk at the time he was hired.
Flowr looking for buyers, investors
Flowr says it wants creditor protection to conduct a “sale and investment solicitation process” to try to get back on its feet financially. If granted, Flowr plans to operate as usual with the current management.
Trading on the TSXV will be suspended.
The initial court order being sought includes:
- a stay of proceedings in favour of the Flowr Group;
- approval of a $2-million DIP (debtor-in-possession) Loan; and,
- the appointment of Ernst & Young Inc. as monitor of the Flowr Group.
If the order is granted, Flowr says it won’t incur further expenses through “filing of continuous disclosure documents, including press releases.”
Flowr already has a $2-million DIP lender lined up, as Avant Brands announced Thursday a numbered company in which it owns a majority of shares would finance the struggling producer—if approved by the court.
Avant has BLK MKT and Tenzo among its brands, and has production facilities in the Okanagan.