Debt Financing for Tomorrow's Cannabis Industry

A team of Torys lawyers have penned a piece for PE Hub Canada that explores debt financing in the cannabis industry.

Partners Cheryl, ReicinAmanda Balasubramanian and Scott Bomhof and articling student Stephen Dalby’s piece “Debt Financing for Tomorrow’s Cannabis Industry” discusses how cannabis-related businesses, particularly licensed producers, will access the funds they need to succeed in a rapidly evolving and highly competitive recreational market.

An excerpt from the article is below:

Future of debt financing in cannabis

As a starting point, there has been exceedingly little to no guidance from federal or provincial regulators on the subject of debt financing in the cannabis industry.

For instance, while the proposed federal regulations released in November more or less confirmed that the current security clearance requirements and restrictions on transferability will persist after legalization, they are silent on whether specific provisions to facilitate financings or bankruptcy and restructuring proceedings will be included.

By comparison, federal and provincial legislation pertaining to other regulated industries have explicitly addressed lenders’ concerns about enforcing security over regulated assets.

Torys lawyers have written extensively on cannabis issues. You can read more on the Emerging Trends in the Cannabis Industry page.

To discuss these issues, please contact the author(s).

This publication is a general discussion of certain legal and related developments and should not be relied upon as legal advice. If you require legal advice, we would be pleased to discuss the issues in this publication with you, in the context of your particular circumstances.

For permission to republish this or any other publication, contact Janelle Weed.

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