Pandemic Begins Triggering Cannabis Bankruptcies
With financing beginning to dry up due to the Covid-19 crisis, more bankruptcies are surfacing within the cannabis industry. As the Financial Post reports, it’s not just the already-weak companies succumbing to financial pressure. Many well-established cannabis companies are also feeling the pressure. Between a virtual collapse in stock prices and dwindling financing options, bankruptcy filings among cannabis companies are beginning to increase.
A shortage of financing options, coupled with reduced sales and plunging stocks has hit many cannabis companies hard. Already hampered by regulatory issues and licensing challenges, many companies in the cannabis industry are beginning to file for bankruptcy protection. For example, CannTrust Holdings Inc. and James E. Wagner Cultivation Corp., both based in Canada, have each filed for bankruptcy protection under Canadian law. Following a spike in sales as a result of stay-at-home orders throughout the U.S. and Canada, sales have waned since, adding to an already volatile market.