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BC Craft Supply Co. shares fell sharply on Wednesday after the Vancouver-based cannabis producer filed for protection from its creditors under Canada’s Bankruptcy and Insolvency Act.
BC Craft Supply CRFTF CA:CRFT OTC shares fell 36% to trade at 20 cents on Wednesday.
It’s the first Canadian cannabis company to file a notice of intention (NOI) to make a restructuring proposal in 2022, according to MJBiz Daily.
The Vancouver-based company named Crow MacKay & Co. as trustee and said it would continue day-to-day operations.
“The objective of filing the NOI is to regain the company’s financial footing although there can be no guarantee that the company will be successful in securing further financing or achieving its restructuring objectives,” BC Craft Supply said in a statement. “Failure by the company to achieve its financing and restructuring goals will likely result in the company becoming bankrupt.”
The NOI filing gives the company a 30-day stay against collection efforts by creditors. The Supreme Court of British Columbia may extend the NOI for up to six months.
For the nine months ended June 30, the company reported a loss of about $1.9 million and revenue of about $636,000 with about $84,000 of cash on hand.
The move by BC Craft Supply comes as November cannabis sales fell 2.9% over the previous month to about $282.5 million. The latest figure marked the first monthly sales drop since February, 2021.
BC Craft Supply in August said is had “significant doubts” of its ability to meet its obligations as they come due.
BC Craft Supply comes after similar moves by Ascent Industries in December.
Meanwhile, Hexo’s
HEXO,
HEXO,
auditor questioned the company’s viability last year.
Also Read: Investors in cannabis companies burned by stock-market losses in 2021 even as the pot business grows
