KSV Advisory Canada’s Leading Boutique Advisory, Restructuring and Valuations Firm.

Tombstone

MJardin Group Inc. (“Mjar”)

MJardin Group Inc. (“Mjar”) and several subsidiaries produce and sell cannabis from two manufacturing facilities located in Ontario. One of Mjar’s subsidiaries holds a Cannabis Act license which permits it to cultivate, process and sell cannabis for the medical and recreational/adult-use markets and to sell cannabis plant seeds, cannabis plants, dried cannabis and fresh cannabis to provincially/territorially authorized distributors/retailers and directly to consumers with medical documents.

In early 2022, the Court made an order appointing KSV as receiver and manager of Mjar. The receivership application was brought by PricewaterhouseCoopers Inc., in its capacity as Court-appointed receiver and manager of Bridging Finance Inc (“Bridging”).  At the time of the receivership application, Bridging was owed approximately $180 million by Mjar.

The shares of Mjar were traded on the Canadian Securities Exchange prior to the commencement of the receivership, at which time its shares were delisted. 

During the receivership proceedings, KSV reviewed and considered options to restructure MJar in order to maximize recoveries for stakeholders. Following this review, KSV recommended that Mjar and certain of its subsidiaries (the “CCAA Entities”) file for protection under the Companies’ Creditors Arrangement Act (“CCAA”) so that they could implement an operational and financial restructuring, and continue on a going-concern basis. Based on this recommendation, an application was made to place the CCAA Entities in CCAA.  An initial order was granted on June 2, 2022.

The CCAA Entities retained a Chief Restructuring Officer (“CRO”), on the recommendation of KSV, to lead the operational restructuring. The focus of the operational restructuring is to transition MJar’s business from retail to wholesale. KSV is working with the CRO to rationalize costs, including reducing supply chain spending, disclaiming certain contracts and reducing headcount. A process is also being led by the CRO, with KSV’s oversight, to optimize production, including by increasing packing efficiency and incorporating certain production onsite rather than outsourcing. The turnaround plan contemplates the sale of certain cannabis internationally for higher margins than are presently being achieved domestically.