Saving Cannabis Inventory From Going Up In Smoke

A recent decision established that Canada Revenue Agency ("CRA") should not withhold the renewal of an excise licence issued under the Excise Act, 2001 ("Excise Act") where an excise licence is necessary for the debtor to deal with their assets within an insolvency proceeding.

On July 10, 2023, the British Columbia Supreme Court (the "Court") provided its oral reasons in Tantalus Labs Ltd. (Re), 2023 BCSC 1450, a decision which involved a dispute between Tantalus Labs Ltd. ("Tantalus"), a B.C. based cannabis company that filed a Notice of Intention to Make a Proposal (the "NOI" and the "NOI Proceedings") pursuant to s. 50.4 of the Bankruptcy and Insolvency Act (the "BIA") and CRA, over its declaration that Tantalus was ineligible for renewal of its cannabis excise license (the "Excise Licence") under the Excise Act, which was essential to allow Tantalus to sell its cannabis inventory in the NOI Proceedings for the benefit of its stakeholders.