Debt Financing Strategies for the Canadian Cannabis Industry of Tomorrow

Partners Cheryl Reicin, Amanda Balasubramanian and Scott Bomhof and articling student Stephen Dalby have penned an opinion piece that has appeared in Marijuana Venture magazine.

Debt Financing Strategies for the Canadian Cannabis Industry of Tomorrow” explores debt financing in the cannabis industry and how businesses in the industry will secure the funding they’ll need to be successful the fledgling industry.  

An excerpt from the article is below.

Many factors have contributed to the underuse of loans in the cannabis sector, but none more significant than the challenge of taking adequate security. Central to this challenge are the regulatory restrictions placed on a licensed producer’s most valuable asset — its license. Currently, any cannabis license issued by Health Canada under the ACMPR is tied to the specific licensee and to the address of the licensee’s facility — it cannot be transferred to another entity, nor is it effective for any other location. Coupled with the requirement that all directors and officers of a licensed producer and any person “in charge” of a producer’s facility must have security clearance from the Royal Canadian Mounted Police, a license is ineffective collateral to any would-be lender.

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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