Muskoka Grown Faces Cash Crunch - Files For Protection
Bracebridge Cannabis producer Muskoka Grown asked for temporary relief from creditors earlier this month so it can continue to conduct business and develop a plan to restructure its affairs according to a report in Marijuana Business Daily.
The Bracebridge company cited the COVID-19 pandemic, a substandard first crop of cannabis and a lack of brick-and-mortar stores in Ontario for its liquidity issues.
The cannabis producer filed a Notice of Intention to Make a Proposal under the Bankruptcy and Insolvency Act on May 5, according to documents posted by the company’s trustee.
That move gives Muskoka Grown extra time to develop a proposal to present to creditors.
To principal secured creditor agreed to provide additional financing to Muskoka Grown.
The proceeds of the loan will be used to finance operating expenses and restructuring, according to the records.
“Without the DIP loan, Muskoka Grown faces an immediate cessation of its going-concern operations and the potential loss of the cannabis License,” according to a document.
Muskoka Grown employs about 47 full-time people.