Restructure, Recover, Rebuild: A Guide For Cannabis Operators In Transition

In Canada's evolving cannabis industry, entering a restructuring process such as under the Companies' Creditors Arrangement Act (the "CCAA") is no longer seen as a failure, but rather as a tool to preserve business continuity and long-term value. However, navigating the CCAA process is only one part of the journey. For licensed producers, maintaining credibility with regulators, distributors, and the marketplace is just as critical as managing legal proceedings.

This article outlines key challenges and reputational strategies for cannabis companies undergoing restructuring.

Excise compliance: Maintaining the license and the relationship

The Canada Revenue Agency (the "CRA") continues to play a central role in overseeing the cannabis sector, particularly in relation to excise duty. Misconceptions persist about the CRA's credit and collateral policies; however, the agency has clarified that its guidelines on credit terms and bond coverage are publicly accessible.