Toronto-based Slang Worldwide (CSE: SLNG) (OTCQB: SLGWF) became the latest multistate cannabis company to go belly-up, with an announcement Tuesday that it is entering receivership in Colorado and declaring bankruptcy in Canada, effectively closing up shop.
Slang “finalized a wind-down plan,” the company stated in a press release, after noting it has debts maturing this month that it simply cannot pay.
That includes a $17.3 million loan that’s coming due along with multiple smaller loans, primarily to lenders Trulieve Cannabis Corp. (CSE: TRUL) (OTCQX: TCNNF), Pura Vida Investments and Seventh Avenue Investments, according to regulatory filings.
At the close of the second quarter this year, Slang had a working capital deficit of the same amount as the loan, $17.3 million, according to regulatory filings. In its most recent quarter, Slang reported quarterly net losses of $8.3 million and year-to-date losses of $12.7 million as of June 30.
Slang “does not anticipate being able to repay amounts owing … at the upcoming maturity date of November 15, 2024,” the company said in its Tuesday press release.
Therefore, Slang has taken steps to sell off assets in Colorado via a receivership, is looking to sell its Vermont assets, and has also begun bankruptcy proceedings in Canada per the federal Bankruptcy and Insolvency Act, the company said.
“Despite the best efforts of the Company, it has been unable to attract a viable transaction to restructure its debts and/or seek any sales of the Company or of its assets in the normal course,” Slang said in the release. “The difficult decision to approve and enter into the wind-down plan was made after careful consideration of the current financial condition of the Company and its subsidiaries, the Company’s inability to pay its liabilities as they become due, and negotiations between the Company and the Lenders.”
B. Riley Farber is likely to be the appointed trustee for bankruptcy proceedings, Slang said.
Slang is the latest in a string of high-profile cannabis companies to go under in recent years, following StateHouse Holdings, MedMen Enterprises, High Times, Eaze, Herbl, Green Dragon, Skymint, GrassDoor and others.