Alberta-based cannabis company seeks buyer amid financial troubles

Alberta-based cannabis company

What happened to 314 Pure Cannabis Ltd.?

314 Pure Cannabis Ltd. (314 Pure) is a cannabis company that operated a cultivation and hydroponic growing facility in Crossfield, Alberta. The facility is approximately 21,700 sq. ft. in size on a lot that is approximately 3.0 acres. 314 Pure also owns a total of approximately 15.61 acres of land surrounding the facility, of which 12.61 acres have been deemed as excess land.

However, the company has been facing financial difficulties and was unable to meet its obligations to its creditors. On January 11, 2024, Harris & Partners Inc. was appointed as the receiver (the Receiver) of all the assets, undertaking and properties of 314 Pure pursuant to an Order of the Court of King’s Bench of Alberta (the Court).

What is the sales process for 314 Pure?

On February 9, 2024, the Receiver commenced a sales process (the Sales Process) for 314 Pure. The Sales Process is being conducted in accordance with the procedures, which can be located on the Receiver’s website. Interested parties who wish to pursue a potential acquisition and receive additional diligence materials will be required to execute a Confidentiality Agreement, which can be obtained by contacting Avison Young directly.

Per the Sales Process, non-binding letters of intent must be submitted by no later than 5:00 pm (Calgary Time) on March 15, 2024. The Receiver will evaluate the offers and select the best one, subject to the approval of the Court.

What are the opportunities and challenges for the cannabis industry in Alberta?

The cannabis industry in Alberta has been growing rapidly since the legalization of recreational cannabis in Canada in 2018. According to Statistics Canada, Alberta had the highest per capita cannabis sales in the country in 2020, with $123.6 million worth of legal cannabis sold in the province. Alberta also had the most cannabis retail stores in Canada, with 534 outlets as of December 2020.

Alberta-based cannabis company

However, the cannabis industry in Alberta also faces some challenges, such as the oversupply of cannabis, the competition from the illicit market, the regulatory uncertainty, and the impact of the COVID-19 pandemic. Some cannabis companies in Alberta have struggled to survive and have resorted to restructuring, downsizing, or selling their assets.

For example, in 2020, Sundial Growers Inc., another Alberta-based cannabis company, sold its Rocky View facility for $5 million, after buying it for $22 million in 2017. Sundial also laid off about 10% of its workforce and closed its flagship store in Calgary.

What are the implications of the sales process for 314 Pure?

The sales process for 314 Pure is an opportunity for potential buyers to acquire a cannabis facility and land in Alberta at a discounted price. The facility has a production capacity of 2,500 kg of cannabis per year and is equipped with state-of-the-art technology and equipment. The land also has the potential for expansion or development.

However, the sales process for 314 Pure also comes with some risks and uncertainties, such as the legal and financial liabilities of the company, the approval of the Court, and the competition from other bidders. The buyers will also have to deal with the challenges of the cannabis industry in Alberta and the changing consumer preferences and demands.

The sales process for 314 Pure is a reflection of the dynamic and competitive nature of the cannabis industry in Alberta and Canada. It shows that the cannabis industry is not immune to the economic and market forces that affect other sectors. It also shows that the cannabis industry is still evolving and maturing, and that there are opportunities and challenges for both existing and new players.

By Benjamin Parker

Benjamin Parker is a seasoned senior content writer specializing in the CBD niche at CBD Strains Only. With a wealth of experience and expertise in the field, Benjamin is dedicated to providing readers with comprehensive and insightful content on all things CBD-related. His in-depth knowledge and passion for the benefits of CBD shine through in his articles, offering readers a deeper understanding of the industry and its potential for promoting health and wellness.

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