Canadian cannabis edibles maker Indiva enters creditor protection

Canada’s leading producer of cannabis edibles is restructuring its business under the bankruptcy protection laws as it seeks to sell assets to repay creditors.

Indiva and its subsidiaries under Indiva Group have been granted relief by the Ontario Superior Court of Justice under the Companies’ Creditors Arrangement Act to restructure their business and finances, according to a news release.

The credit protection order from the court includes:

• A stay of proceedings.
• Approval of debtor-in-possession financing.
• Appointment of PricewaterhouseCoopers as monitor.
• Relief from certain reporting obligations under securities laws and stock exchange rules.

The stay and financing is aimed at providing Indiva with more time to consider potential restructuring transactions and maximize the value of its assets for the benefit of its creditors and other stakeholders.

This could include the sale of all business assets through a court-supervised sales process akin to receiverships in the United States, which are increasing in the cannabis industry.

Alberta-based law firm Bennett Jones was hired as counsel for the Indiva Group in its CCAA proceedings.

London, Ontario-headquartered Indiva said it intends to seek court approval to sell its business and assets and expects to finalize a deal with SNDL, an existing creditor and significant stakeholder.

The SNDL offer will act as stalking-horse bid for other potential buyers.

In the interim, Indiva said, operations will continue.

Shares of Indiva, which trade as NDVA on the TSX Venture Exchange, may be halted, suspended or delisted during filing for credit protection, the company warned.

In April, the company said it hired SSC Advisors to help it evaluate strategic options to maximize shareholder value.

Meanwhile, Indiva announced that Rachel Goldman has resigned from the board.