Two more cannabis companies have filed for creditor protection amid a crash in the federally-licensed marijuana market. A total 34 wholesalers and retailers have become insolvent since 2020..According to Blacklock's Reporter, Superette Inc., a $24 million operator of six marijuana stores in Toronto and Ottawa, wrote in a submission to Ontario Superior Court that it “faces an immediate liquidity crisis driven in large part by the distressed state of the cannabis retail market in Canada generally.” The chain reported total sales of $447,282 last year..“The current cannabis market downturn and adjustment of the cannabis retail market has made it impossible for the Superette Group to conclude a sale of its businesses outside of a court-supervised process or continue operating at current levels,” the company’s CEO wrote in an affidavit filed under the Companies’ Creditors Arrangement Act..Superette reported $6.5 million in liabilities. Debts included a $60,000 interest-free Canada Emergency Business Account loan backed by taxpayers..Another retailer, Under The Sun Groweries Inc. of Saskatoon, also filed notice to creditors. Groweries reported $4.8 million in debts including $935,957 in unpaid taxes owed the Canada Revenue Agency and $34,329 owed the Department of Health..Marijuana companies have complained of low profits and high costs including federal fees and taxes. “It has almost made it impossible,” Timothy Deighton, owner of Sweetgrass Cannabis Ltd. of Ymir, B.C., testified June 20 at the Commons agriculture committee..George Smitherman, CEO of the Cannabis Council of Canada, counted 800 licensed wholesalers and 3,000 retail stores nationwide. Parliament’s 2018 legalization has not succeeded in “eliminating the illicit market,” said Smitherman..“We need to see change if the fuller potential of the goals of legalization are going to be achieved,” said Smitherman. “I want to draw your attention to the threat of the very sustainability of many license holders of all sizes posed by unsustainably high taxes, fees and markups that leaves almost nobody cash flow positive.”.Failed marijuana firms include Eve & Co. Inc. of Strathroy, Ont. Liberal MP Yasir Naqvi (Ottawa Centre), parliamentary secretary for emergency preparedness, was a corporate director..Eve & Co. filed as insolvent last April with $1.9 million owing to the Canada Revenue Agency including $1.4 million in unpaid excise tax and $267,932 in GST liabilities. The company had claimed to operate “one of the largest cultivation and processing facilities in the world at one million square feet.”
