Davies partners Natalie Renner and Robin Schwill were featured by Canadian Lawyer this week in an article on their facilitation of a “going concern” asset sale of an insolvent cannabis company – a Canadian industry first.

The sale involved a complete transfer of the business, and the issuance of all-important Health Canada licences, to a third party in record time. Part of the “secret sauce” allowing the deal to go through quickly, and as a going concern, Natalie says, was working with Health Canada early in the process to devise a “novel structure” that helped facilitate the sale and issuance of new licences.

The deal could serve as a template for future transactions in the cannabis sector, now going through a period of consolidation. As Robin points out, not only will cannabis companies in similar circumstances see there is a pathway to selling the business as a going concern in an insolvency proceeding, but “Health Canada knows that it has the internal processes to deal with the licence issue.”

Adds Natalie: “It opens up options in the context of insolvency and I think generally it's going to produce more competitive processes, as well as save jobs, and keep businesses running as a going concern. It’s the type of story we like to see in the insolvency world.”