b'ASSET REALIZATIONS IN THE NEW WORLD 2.Outside of the relevant licenses, other assets to beparticular to ensure that practitioners are adequately realized are likely to include land and buildings,protected where there may be future adverseequipment and cannabis inventory. Productionproduct reactions.equipment, and in particular, cannabis inventory,CONCLUSIONwill be saleable to a limited number of purchasers,Recent filings involving crypto-currency exchanges and the consisting of other licensed producers or retailers. cannabis industry highlight the need for insolvency practitioners to be prepared to deal with these assets and from the start, to 3. As is the case for technology assets, industry specific expertise will be key to navigating regulatorybring strategies to the table to ensure the best possible outcome requirements and maximizing the realizable value offor stakeholders. This article provides food for thought in assets. In terms of any marketing process, the targetdeveloping some of these strategies with all practitioners staying list will be largely limited to those who already holdtuned to see how they play out as more relevant filingsthe relevant licenses. The limited number of potentialare advanced. RSpurchasers, coupled with the complexity, time and costVanessa Allen is a Certified Insolvency Restructuring Professional, associated with the potential transfer of a license, willLicenced Insolvency Trustee, and a Senior Vice-President with MNP likely increase the use of stalking horse bids to assureLTD based in Calgary. Vanessa leads both formal and informal both the debtor and the regulator of an appropriateinsolvency and turnaround engagements for troubled companies in a buyer, provide the stalking horse bidder with comfortwide range of industries.She acts in a variety of corporate insolvency that the resources they spend in completing their dueengagements, including bankruptcies, proposals, private and diligence will not be wasted, and properly expose theCourt-appointed receiverships, proceedings under the Companies assets to the market. Creditors Arrangement Act and Chapter 15 proceedings. Vanessa 4. As cannabis is federally legislated in Canada, therealso handles business review and monitoring engagements foris no issue with respect to accessibility to insolvencycompanies that are experiencing poor financial or operational results.proceedings. This is not the case in the U.S., whereDean Hutchison is a Lawyer and a Partner with MLT Aikins cannabis producers do not have access to federalLLP based in Calgary. Dean oversees the firm\'s Insolvency and insolvency legislation since the estates cannot beRestructuring Group in Alberta and regularly represents and advises administered without violating federal law. Thissecured lenders, debtor companies, unsecured creditors, investors, creates a unique challenge where companies operate incourt appointed officers and insolvency professionals on all nature of both Canada and the U.S., with a potential solutioninsolvency and restructuring matters, including proceedings under existing in the form of insolvency proceedings beingthe Companies\' Creditors Arrangement Act, the Bankruptcy and commenced in Canada and then recognized in theInsolvency Act, and Court ordered receiverships.U.S. under Chapter 15 of the U.S. Bankruptcy CodeThe Authors wish to recognize the contributions of Catrina Webster, which, arguably, does not create a bankrupt estate ina Lawyer and Associate with MLT Aikins LLP Insolvency and the U.S. 9 Although Ascent is listed as having operationsRestructuring Group based in Calgary, to this article.The authors in both Canada and the U.S., only the Canadianthank Catrina for her research, contributions and assistance. operations are currently being restructured. As such, we will have to wait for a future filing to see how cross-border proceedings will be addressed.4Gregory Azeff, Stephanie De Caria & Matthew McGuire, Governing5.Reputational and personal risk for practitionersthe Ungovernable: Cryptocurrencies in Insolvency Proceedings (Annual will continue to be a consideration in acceptingReview of Insolvency Law, 2018) 363 at 386. [Cryptocurrencies inengagements. Where a practitioner is not otherwise5 Insolvency Proceedings].Supra note 3See the "Order (Representative Counsel Appointmentlinked to the cannabis industry, taking possession ofOrder)" issued February 28, 2019 and the "Order (Appointing the Official cannabis assets may affect their ability to travel to or doCommittee of Affected Users)" issued March 18, 2019 in the Quadriga CX business in certain jurisdictions where cannabis is notCCAA proceedings, Online: Ernst & Young Inc.https://documentcentre.eycan.com/Pages/Main.aspx?SID=1445.yet legalized. 6 Cryptocurrencies in Insolvency Proceedings, Supra note 13. 7 6. There may be significant uncertainty around valuationGrant Bazian, The Highs and Lows of Serving Canadas Newest Emerging Market (7 December 2018), online: MNPdue to the industrys relatively short history, high< https://mnpdebt.ca/en/corporate/blog>. [Highs and Lows].volatility and complex regulatory structure. 10 In8In the Matter of a Plan of Compromise or Arrangement of Ascent addition, valuations may change significantly as moreIndustries Corp., Agrima Botanicals Corp., Bloom Holdings Ltd., Bloom Meadows Corp., Agrima Scientific Corp., Pinecone Products Ltd. and is known regarding licensing, overall demand for theWest Fork Holdings NV Inc.Supreme Court of British Columbia Court products or other market transactions. File No.: S-192188 (the "Ascent CCAA Proceedings").9Jason Rosell, Will U.S Cannabis Companies Find Grass is Greener in 7. While not all insurance companies service the cannabisCanada for Restructuring? (2019) Jan/Feb Journal of Corporate industry, both producers and retailers should have noRenewal 2 [Grass is Greener].10Chris Walsh, Appraising a Marijuana Business (10 September 2014) difficulty in finding adequate coverage within the suite online: Marijuana Business Daily < https://mjbizdaily.com>.of traditional insurance products.11 Where insolvency11Bethan Moorcraft, Transferring Risks for Licensed Cannabis practitioners are taking possession of cannabis assets,Producers and Retailers, Insurance Business Canada Online,the most pressing concern will likely be ensuring(12 November 2018), online: Insurance Business Canadathat there is adequate long-tail liability insurance, in. Volume 19 Issue 2 Rebuilding Success 37'