An insolvent cannabis contract manufacturer filed a notice of intention to make a proposal under s. 50.4(1) of the Bankruptcy and Insolvency Act and sought orders approving DIP financing, a further stay extension, a SISP with a stalking horse bid, and related charges.
The court raised concerns about the SISP because the stalking horse agreement had not yet been executed, the milestones were abbreviated, the treatment of employees and contracts was uncertain, and a break fee was contemplated before any definitive agreement existed.
Following a standdown, the company abandoned pursuit of the full relief and requested only a brief stay extension to February 17, 2026.
The court was satisfied that the three-part test under s. 50.4(9) of the BIA was met and granted the short extension, finding no evidence of bad faith, no material prejudice to creditors, and sufficient liquidity for the brief period.
