Back on September 26, 2018, Ascent Industries announced that Health Canada had informed the Company’s wholly-owned subsidiary, Agrima Botanicals Corp. that it did not meet all of its record keeping and other compliance requirements during a Health Canada inspection conducted between August 28th and August 30th.
Agrima Botanicals had its cannabis licenses suspended by Health Canada and began addressing the identified issues with the federal agency. Since that time, things appeared to disintegrate from bad to worse, resulting in Ascent Industries Corp. announcing in March 2019 that the Supreme Court of British Columbia had issued an order granting the company creditor protection.
According to CBC Canada, the company filed for CCAA to address near-term liquidity issues which were in “large part caused by Health Canada’s suspension of its licenses under its subsidiary Agrima Botanicals Corp.”
According to Seeking Alpha, “Health Canada asserts that unauthorized activities with cannabis took place under the Company’s ACMPR license during this period.”
While under CCAA protection, Ascent says it has received a commitment of interim financing for up to 2 million Canadian dollars ($1.5 million) from Gulf Bridge. Gulf Bridge is a Dubai-based secured creditor of Ascent. This will allow the company to continue day-to-day operations.
In a July 9, 2019 report by Ascent’s court-appointed monitor Ernst & Young said the firm hired a consultant to engage with Health Canada about the sale or transfer of the suspended licenses, but received no response from the regulator.
