Kelowna cannabis company gets creditor protection
Kelowna-based cannabis company Flowr has been granted creditor protection after reporting heavy losses for the last 18 months.
The cannabis company owes dozens of companies more than $7.3 million and was granted creditor protection at the Ontario Supreme Court Oct. 20.
While the company's head office is in Toronto it operates from an 85,000-square-foot site on McCarthy Road in Kelowna.
According to court documents, Flowr signed a 25-year lease on the Kelowna building where it currently employs more than 80 staff.
The 2021 financial statements show the company sustained total comprehensive losses of $92 million and had revenue of $12.3 million.
In the first six months of this year, it had losses of $23.4 million and revenue of $2.7 million.
Shares in the firm currently cost three cents.
The company blames an oversaturated market where cannabis licences went from roughly 100 at legalization in 2018 to 800 currently.
"Over-supply of cannabis products has led to significant price compression and oversaturation of products," the court documents say.
Flowr, which touts its "decades" long history in the business — which was only legalized in 2018 — also blames excessive taxes, complex regulatory requirements, government delays in licensing, and limits on dosage size, packaging and marketing.
"The confused, chaotic and complicated roll-out of the cannabis retail system in Ontario – the largest domestic cannabis market – added uncertainty and complication to the Flowr Group’s operations," the documents say.
The company brags on its website that "it was in the underground that we earned our stripes, honed our craft and grew our reputation" but also points to the illegal cannabis market.
"The illicit cannabis market continues to enjoy substantial competitive advantages and flourish, further adversely impacting legal retailers," the documents read.
Flowr says that roughly 40 percent of the cannabis market is still run by illegal drug dealers.
The court documents say that Health Canada reported that federally licensed marijuana producers destroyed 425 million grams – or 468 tons – of unsold, unpackaged dried cannabis last year due to an oversaturated market.
READ MORE: Province cracks down on Indigenous pot shop in South Okanagan
CORRECTION: The photograph for this article was changed at 4:30 p.m. Wednesday, Nov.2, 2022 because the original was outdated.
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