The Cannabist Company: CCAA Wind-Down and Chapter 15 Recognition of $220M Cannabis Restructuring

On March 25, 2026, The Cannabist Company Holdings Inc. and The Cannabist Company Holdings (Canada) Inc. filed chapter 15 petitions in the U.S. Bankruptcy Court for the District of Delaware (Case No. 26-10426), seeking recognition of voluntary proceedings commenced one day earlier under Canada's Companies' Creditors Arrangement Act in the Ontario Superior Court of Justice. The filings followed a missed interest payment on December 31, 2025, five successive forbearance extensions with senior secured noteholders, and a Moelis-led sale process that had already closed a $130 million Virginia transaction and signed agreements for Ohio and Delaware assets. The restructuring is a structured wind-down backed by holders of approximately 60% of the company's senior secured notes, with proceeds to be distributed through a CCAA Plan of Compromise and Arrangement. Judge Brendan L. Shannon granted provisional relief on March 26, 2026, extending the Canadian court's stay protections to U.S. assets and approximately 70 leases and executory contracts.

Debtor(s)	The Cannabist Company Holdings Inc. (2 jointly administered entities)
Court	U.S. Bankruptcy Court, District of Delaware
Case Number	26-10426
Judge	Hon. Brendan L. Shannon
Petition Date	March 25, 2026
CCAA Commencement Date	March 24, 2026
Canadian Court	Ontario Superior Court of Justice (Commercial List)
Monitor	FTI Consulting Canada Inc.
CRO	SierraConstellation Partners LLC (Curt Kroll)
Total Funded Debt	~$220M ($179M Senior Notes + $40.4M mortgage)

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The Cannabist Company

What are the key takeaways from “The Cannabist Company: CCAA Wind-Down and Chapter 15 Recognition of $220M Cannabis Restructuring”?

From Columbia Care to Cannabis Wind-Down

The Cannabist Company Holdings Inc., formerly Columbia Care Inc., is a Canadian holding company publicly traded on CBOE Canada (ticker: CBST) and the OTCQB Exchange (ticker: CBSTF). The company is incorporated under the Business Corporations Act (British Columbia), with a registered office in Vancouver. Between 2019 and 2024, the Parent Company raised approximately C$340 million through common stock issuances and $320 million in secured debt from Canadian capital markets, with RBC Dominion Securities Inc. as the designated market maker.

The CC Group operates through two categories of subsidiaries. Non-Cannabis Subsidiaries serve as intermediate holding companies or operating companies that conduct management and administrative functions, employing approximately 1,200 people, and do not handle cannabis or hold cannabis licenses. Cannabis Subsidiaries operate cannabis businesses in eight U.S. states and are not debtors in the chapter 15 cases, as described in the Kroll Declaration.

In June 2024, CEO David Hart announced a corporate restructuring that included exiting the Florida market and divesting underperforming assets in Colorado and New York, targeting $10 million in annualized cost savings and a $20 million improvement in Adjusted EBITDA. Hart had been appointed CEO in January 2024, succeeding Nicholas Vita. Despite these measures, the CC Group reported net losses of $105.1 million for the 12 months ended December 31, 2024, and $124.2 million for the nine months ended September 30, 2025, as stated in the Motion for Recognition.

Section 280E, IRS Enforcement, and Industry Headwinds

Cannabis businesses face restricted access to banking and capital markets due to the federal Schedule I classification under the Controlled Substances Act. The IRS has historically asserted that Section 280E of the Internal Revenue Code prevents cannabis operators from taking standard business deductions or credits, effectively requiring them to pay taxes on gross revenue rather than gross profits. The Cannabist Company disputes this position, along with numerous other publicly listed multi-state operators, as stated in the Kroll Declaration.

IRS enforcement actions. The IRS asserted federal income tax claims totaling approximately $51 million for the 2022 and 2023 tax years based on Section 280E. The Parent Company and the IRS entered into a payment plan requiring monthly payments of $500,000 until the debt was paid in full, in exchange for the IRS releasing a federal tax lien filed against the company's assets. In April 2025, the IRS issued a notice of levy on certain accounts of the Parent Company after it failed to make a timely payment under the plan. The IRS has not communicated any asserted tax liabilities for the 2024 or 2025 tax years.

Rescheduling developments. On December 18, 2025, the President issued Executive Order No. 14370 directing the Attorney General to complete the rescheduling of cannabis from Schedule I to Schedule III. Once implemented, rescheduling would eliminate the application of Section 280E. HHS had previously recommended rescheduling, concluding cannabis has a "Currently Accepted Medical Use in Treatment," as noted in the Motion for Recognition.

Capital Structure and Senior Notes Maturity Extension

As of the CCAA commencement date, the CC Group had approximately $220 million in funded debt.

Senior Notes (~$179 million). The Senior Notes were issued under an Amended and Restated Trust Indenture dated May 29, 2025, with the Parent Company and the Cannabist Canada Company as co-issuers and Odyssey Trust Company as trustee. The notes consist of $166,262,000 in Senior Secured Notes at 9.25% interest per annum and $12,731,000 in Senior Secured Convertible Notes at 9.0% interest per annum. The Senior Notes are secured by substantially all assets of the CC Group and are governed by British Columbia law.

Mortgage debt (~$40.4 million). Three non-debtor subsidiaries are indebted to East West Bank in the aggregate amount of approximately $40.4 million pursuant to three separate loan agreements, each secured by a mortgage over separate real property. The Parent Company guarantees these loans.

Prior debt exchange. Prior to the 2025 restructuring, the CC Group held $270 million in total senior notes across three tranches: $59.5 million maturing June 29, 2025, $185.5 million maturing February 3, 2026, and $25.5 million maturing March 19, 2027. The company disclosed that it lacked sufficient cash to repay the 2025 notes upon maturity. The CC Group negotiated a CBCA Restructuring Transaction to exchange the existing notes for new Senior Notes with a maturity extended to December 31, 2028. The Ontario Superior Court approved the arrangement in May 2025 after approximately 75% of votes cast favored the arrangement resolution. Murchinson Ltd. opposed the arrangement and applied for an oppression remedy, but the court dismissed the challenge, finding the arrangement fair and reasonable and the oppression claim barred by a "no action" clause in the indenture. The Ontario Court of Appeal subsequently dismissed Murchinson's appeal as moot.

Default and forbearance. On December 31, 2025, the CC Group failed to make an interest payment due on the Senior Notes while a special committee evaluated strategic alternatives. This became an event of default on January 30, 2026, following the expiration of a 30-day grace period. The company entered into a forbearance agreement with a majority of the Senior Noteholders on January 30, 2026, with an initial forbearance deadline of February 17, 2026. The forbearance was extended five times through March 25, 2026 -- the date of the CCAA commencement -- as the parties negotiated the terms of a Support Agreement. Feuerstein Kulick LLP advised the ad hoc committee of senior secured noteholders throughout the forbearance period.

Moelis-Led Sale Process and Asset Transactions

In June 2025, the CC Group engaged Moelis & Company LLC to assist with a sale process involving 29 potential bidders. A special committee of independent directors oversaw the process. The Parent Company also ran a separate "California Process" for its California operations, as described in the Kroll Declaration.

Virginia sale ($130 million -- closed). On December 1, 2025, the Parent Company executed an equity purchase agreement to sell its Virginia cultivation, production, manufacturing, and retail operations to a subsidiary of Curaleaf Holdings Inc. for $110 million: $80 million in cash at closing, $20 million in deferred cash consideration, and a $10 million promissory note. The agreement included a 15-business-day go-shop provision with a $3.3 million break-up fee. During the go-shop period, the CC Group received a superior proposal from Parma Holdco LLC, an affiliate of Millstreet Credit Fund LP, and terminated the Curaleaf agreement on December 18, 2025, paying the break-up fee. The Millstreet transaction provided $130 million in total consideration: $117.5 million in cash at closing and $12.5 million in escrow. Weil, Gotshal & Manges LLP served as counsel. The Virginia sale to Millstreet closed on February 5, 2026 at approximately $130 million.

Ohio sale ($47 million -- pending). On March 23, 2026, the CC Group signed an agreement to sell the equity of six subsidiaries operating in the Ohio market for approximately $47 million.

Delaware sale ($16.5 million -- pending). The same day, the CC Group signed an agreement to sell the assets of Columbia Care Delaware, LLC for approximately $16.5 million.

California transactions (closed). Two California transactions closed: the Mission Bay LLC equity sale for approximately $1 million on January 30, 2026, and the Focused Health, LLC equity sale in March 2026 at an undisclosed price.

Remaining operations. The Parent Company has a non-binding memorandum of understanding for the sale of businesses in Colorado, Illinois, Maryland, Massachusetts, New Jersey, and West Virginia. The CC Group has substantially completed the wind-down of its New York operations and is winding down Pennsylvania operations, including shutting down facilities and liquidating stock. At the first-day hearing, Weil Gotshal counsel David Cohen stated that the sale process timeline will require multiple months due to the need for regulatory approval in each state, with some sales expected to close in one to two months and others taking up to five or six months, as recorded in the first-day hearing transcript.

Support Agreement and CCAA Proceedings

The debtors and an ad hoc group of Senior Noteholders holding approximately 60% of the Senior Notes entered into a Support Agreement governed by the laws of the Province of Ontario. The agreement memorializes support for the Canadian Proceeding, the effectuation of the sales, and the winding down of the estates through a CCAA Plan of Compromise and Arrangement. The Supporting Noteholders' financial advisor is Ducera Partners LLC, with U.S. counsel including Feuerstein Kulick LLP, ArentFox Schiff LLP, and Young Conaway Stargatt & Taylor, LLP as Delaware counsel.

On March 24, 2026, the Ontario Superior Court of Justice entered an Initial Order that recognized the debtors as companies to which the CCAA applies, appointed FTI Consulting Canada Inc. as Monitor, granted the Monitor full access to the debtors' property and records, and ordered a 10-day stay of proceedings. The order also authorized director and officer indemnification charges (excluding gross negligence or willful misconduct) and a charge on assets to secure professional fees for the debtors' counsel, the Monitor, and the Monitor's counsel.

An Amended and Restated Initial Order hearing was anticipated on or around April 2, 2026, to approve the appointment of SierraConstellation Partners LLC as Chief Restructuring Officer, a Key Employee Retention Plan, engagements of Moelis and Ducera Partners, execution of the Support Agreement, and relief from certain securities and capital markets reporting obligations.

Chapter 15 Recognition and Provisional Relief

The debtors assert their Center of Main Interests is in Canada based on several factors: both debtors are incorporated in Canada with registered offices there; the Parent Company is listed on CBOE Canada in Toronto; approximately C$340 million was raised through Canadian agents; the A&R Indenture is governed by British Columbia law; approximately 37% of the Senior Noteholders are domiciled in Canada; the 2025 CBCA Restructuring Transaction established creditor expectations of Canadian restructuring jurisdiction; and decision-making is described as "largely Canadian-driven," as stated in the Motion for Recognition.

Judge Shannon granted provisional relief on March 26, 2026, giving the Canadian court's Initial Order full force and effect in the United States on a provisional basis. The order applied sections 362 and 365(e) of the Bankruptcy Code to the debtors, enjoining commencement or continuation of judicial, administrative, or other proceedings against the Stay Parties or their U.S. assets. The order also prohibited counterparties to approximately 70 leases and executory contracts from cancelling, terminating, or modifying such agreements for non-payment or insolvency-related reasons, and barred landlord liens, lock changes, and eviction proceedings.

U.S. Trustee objection. The U.S. Trustee objected to the breadth of the injunction extending the automatic stay to non-debtor cannabis subsidiaries, arguing that chapter 15 statutory language is limited to the debtor and its assets. Judge Shannon overruled the objection, finding the relief consistent with the legislative intent of chapter 15 and established practice in the jurisdiction. The UST reserved all rights to raise public policy exceptions under section 1506 at the final recognition hearing, scheduled for May 12, 2026, as noted in the first-day hearing transcript.

Key Professionals

Debtor advisors. Weil, Gotshal & Manges LLP (David J. Cohen, Garrett Fail, Alexander P. Cohen, Andrew J. Clarke, Robert B. Niles-Weed, Ronit Berkovich) serves as U.S. counsel; Richards, Layton & Finger, P.A. (Zachary I. Shapiro) as Delaware counsel; and Stikeman Elliott LLP (Lee Nicholson) as Canadian counsel. Moelis & Company LLC is the investment banker. SierraConstellation Partners LLC (Curt Kroll) is the Chief Restructuring Officer, and FTI Consulting Canada Inc. serves as Monitor, with Torys LLP as Monitor's Canadian counsel and Morris, Nichols, Arsht & Tunnell LLP (Derek C. Abbott, Alexis L. Sullivan) as Monitor's Delaware counsel.

Noteholder advisors. Feuerstein Kulick LLP (David Feuerstein, Samantha Gleit) represents the ad hoc noteholder group, along with ArentFox Schiff LLP (George P. Angelich) and Young Conaway Stargatt & Taylor, LLP (Sean M. Beach, Matthew B. Lunn, Eric A. Lovetri) as Delaware counsel. Ducera Partners LLC is the Supporting Noteholders' financial advisor. Odyssey Trust Company serves as trustee for the Senior Notes. Verita Global and Kurtzman Carson Consultants serve as claims and information agents.

Key Timeline

Date	Event
2019-2024	Parent Company raises ~C$340M in equity and ~$320M in secured debt
2023-2024	Operational restructuring: divestitures, headcount reductions, cost containment
January 2024	David Hart appointed CEO
June 2024	Corporate restructuring announced; Florida exit and asset divestitures begin
October 2024	CC Group negotiates support agreement for CBCA debt maturity extension
May 29, 2025	A&R Indenture executed; Senior Notes maturity extended to December 31, 2028
June 2025	Moelis & Company engaged; sale process commences with 29 potential bidders
December 1, 2025	Virginia EPA executed with Curaleaf ($110M); go-shop provision included
December 18, 2025	Curaleaf deal terminated; Millstreet superior proposal accepted ($130M); Presidential EO No. 14370 directs cannabis rescheduling
December 31, 2025	CC Group fails to make interest payment on Senior Notes
January 30, 2026	Forbearance agreement entered with majority of Senior Noteholders
January 30, 2026	Event of default (30-day grace period expires); Mission Bay sale closes (~$1M)
February 5, 2026	Virginia sale to Millstreet closes (~$130M)
February-March 2026	Five successive forbearance extensions
March 23, 2026	Ohio ($47M) and Delaware ($16.5M) sale agreements signed
March 24, 2026	CCAA proceeding commenced; Ontario Superior Court issues Initial Order
March 25, 2026	Chapter 15 petitions filed in Delaware
March 26, 2026	First-day hearing; provisional relief granted by Judge Shannon
April 2, 2026	Anticipated ARIO hearing (CRO, KERP, financial advisors, Support Agreement)
April 27, 2026	Objection deadline for chapter 15 recognition
May 12, 2026	Recognition hearing scheduled

Frequently Asked Questions

Why did The Cannabist Company file for bankruptcy?

The CC Group filed after a missed December 31, 2025 interest payment on its Senior Notes created an event of default. The underlying causes included $51 million in disputed IRS tax claims under Section 280E, persistent net losses ($105.1 million in 2024 and $124.2 million for the first nine months of 2025), and industry-wide challenges including restricted access to banking and capital markets due to cannabis's federal Schedule I classification.

Is this a chapter 11 reorganization?

No. This is a cross-border CCAA/chapter 15 restructuring. The primary proceedings are under Canada's Companies' Creditors Arrangement Act in the Ontario Superior Court of Justice, with the chapter 15 petitions seeking U.S. recognition of the Canadian proceeding. The case is a structured wind-down and asset sale, not a traditional reorganization.

What assets have been sold or are pending sale?

The Virginia operations were sold to Parma Holdco LLC (Millstreet Credit Fund LP) for approximately $130 million, closing on February 5, 2026. An earlier agreement with Curaleaf Holdings Inc. at $110 million was terminated during a contractual go-shop period after Millstreet submitted a superior proposal. The Ohio sale ($47 million) and Delaware sale ($16.5 million) were signed on March 23, 2026 and remain pending regulatory approval. Two California transactions have also closed. Non-binding MOUs exist for operations in Colorado, Illinois, Maryland, Massachusetts, New Jersey, and West Virginia.

What is the role of the U.S. cannabis subsidiaries in the case?

The Cannabis Subsidiaries that hold state licenses and operate cannabis businesses are not debtors in the chapter 15 cases. The two debtors are Canadian holding companies. The court granted provisional relief extending stay protections to non-debtor subsidiaries, over a U.S. Trustee objection, to prevent disruption to approximately 70 leases and contracts during the sale process.

Who is the claims agent for The Cannabist Company?

Verita Global and Kurtzman Carson Consultants serve as the claims and information agents for the proceedings.

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