Financially distressed cannabis cultivator James E. Wagner Cultivation Corp. (JWC) said Wednesday it will undergo a “consensual restructuring” and seek creditor protection in a deal with cannabis industry lender Trichome Financial Corp.
Under the deal, Trichome will provide JWC with a debtor-in-possession loan of up to 4 million Canadian dollars ($2.8 million) during the restructuring.
Trichome, which has made previous loans to JWC in exchange for shares and liens on JWC’s assets, will also make a stalking-horse bid to buy the cultivator’s assets.
JWC expects an initial creditor protection order to be granted by an Ontario court Wednesday.
The Kitchener, Ontario-based aeroponic marijuana grower is not the first Canadian cannabis firm to enter creditor protection in recent months.
Licensed cannabis producers Wayland Group and AgMedica Bioscience sought creditor protection last December as they restructured their businesses.
Invictus Group was also granted creditor protection in February in the face of liquidity issues.
Embattled cultivator CannTrust announced Tuesday it had been granted creditor protection in the wake of an unlicensed-cultivation scandal.
The New York Stock Exchange subsequently announced it had begun the process to delist CannTrust.
Shares of James E. Wagner Cultivation trade on the TSX Venture Exchange as JWCA.