A North Okanagan cannabis company that is facing the threat of bankruptcy is working to revive its business.
True Leaf, which built a production facility in Lumby, B.C., went into creditor protection earlier this year.
Now the company’s founder said the business has secured new investment and has made proposals to creditors to get out of creditor protection and avoid bankruptcy.
“This process allows the company to restructure,” True Leaf founder Darcy Bomford said.
“A lot of the debts will hopefully be settled for a sum of money. New capital will come into the company and it will be reorganized and restart.”
While True Leaf’s proposals still needs approval from creditors and the court, Bomford is hopeful that the business will soon be back on track to produce cannabis in the North Okanagan.
True Leaf’s situation is being watched closely in Lumby as losing the company would be a significant blow to the village’s tax base.
“They pay somewhere between $90,000-$120,000 a year in taxes. We want to see that revenue come into our tax flow so we can do things to beautify Lumby,” said Lumby’s mayor Kevin Acton.
It should be clear in November whether True Leaf has gotten the needed approvals to move forward with this proposed restructuring plans and avoid bankruptcy.
True Leaf’s challenges are an example of how dreams of legal cannabis fuelling a “green-rush” in the Okanagan have stalled.
“As everybody knows, the whole cannabis sector experienced some pretty big highs and lows,” said Bomford.
“From 2018 to 2019 the market declined. It was very hard to secure capital to continue our growth.”
When True Leaf broke ground on a new Lumby marijuana production facility in 2018, local officials were hoping cannabis would bring jobs and boost the tax base.
True Leaf did build a facility in Lumby for processing and packaging cannabis, with some limited space for growing, but has yet to grow marijuana there.
“Right in the height of our financial situation is when we received the (cultivation) licence so we just didn’t have the capital to build out more grow rooms and finance the grow,” Bomford said.
Bomford said the 18,000-square-foot facility only had two employees, including himself.
If the restructuring is successful, Bomford said the business will likely initially focus on buying and packing product from other producers.