Facing a debt of over $200 million, FIGR Group has been granted creditor protection while it seeks a buyer, according to court filings by the monitor.
The Ontario Superior Court granted the protection until Jan. 29, but that could be extended. FTI Consulting was appointed as the monitor.
After initial excitement, a number of cannabis companies in Canada began to face trouble early last year, but at the same time FIGR was expanding.
The FIGR Group is comprised of three companies. That includes two processing facilities — FIGR East in Charlottetown, also known as Canada’s Island Garden, and FIGR Norfolk in Simcoe, Ont. — and Toronto-based FIGR Brands, which owns a majority stake in the two processing companies and provides head office services. All together FIGR employs about 200 people.
According to FTI’s filings, FIGR has been operating at a deficit since its launch. It had been largely reliant on indirect subsidiaries of its parent company, North Carolina-based Pyxus International Inc., for financing.
Pyxus has had its own financial troubles, the FTI report says. It recently emerged from financial restructuring. It is FTI’s understanding that the indirect subsidiaries of Pyxus are no longer prepared to continue funding FIGR Group “without an exit strategy.”
Among FIGR’s creditors is ACOA, which the report says was owed about $625,000 as of Nov. 30.
Parent company restructuring
In a news release, Pyxus says it is divesting its cannabis business to focus on tobacco and e-liquids.