A major BC cannabis producer based in Vancouver has been acquired after some financial issues that left it owing millions to creditors.
According to an online filing, Tantalus Labs has an office in Vancouver and a production facility in the Fraser Valley, and it declared bankruptcy in June.
Tantalus Labs owes $8,436,275.33 in unsecured debt to creditors, with over $4 million of that amount attributed to taxes.
It comes as another Canadian cannabis company, Atlantic Cultivation, has stepped in to acquire Tantalus Labs in a deal that includes buying the company’s remaining inventory.
“Excise tax was materially miscalculated at the outset of legalization and often represents 30%+ of a cannabis company’s top-line revenue. This comes before other taxes such as GST, payroll tax, provincial tariffs, and other costs of legal compliance are also extracted,” Tantalus Labs founder Dan Sutton told Daily Hive.
Sutton added that debts will be paid in order of their security “with all cash that accrues to the estate through the liquidation of assets and property.”
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Thankfully, fans of Pacific OG and other popular strains can rest assured that popular items should still be available thanks to the acquisition.
Sutton celebrated the Atlantic Cultivation acquisition but didn’t sound as enthused about how the government handles the cannabis industry.
Proud to announce that @TantalusLabs lives on under the stewardship of @AtlCultivation.
Our beloved retailers and customers will continue to enjoy access to our products across the country. @ccatlanticnl and his team have earned their reputation for top shelf quality,…
— Dan Sutton (@DSutton1986) August 28, 2023
“It is likely that over 55% of the price Canadians pay for their legal cannabis goes to some form of government capture. As long as this policy remains unchanged, small businesses like Tantalus and hundreds of others cannot survive, let alone compete with the still deeply entrenched illicit market,” Sutton stated in an email to Daily Hive.
“The entire purpose of Canadian legalization was to displace these illegal operators, and today, Canada is failing in that goal.”
He went on to say that companies like his need help from the government to have a chance against the illicit market.
“Even the leanest and most commercially successful companies such as Tantalus Labs stand no chance against the black market until Government adjusts this broken taxation policy.”
Despite the downfall, Sutton is still proud of his team for facing “unwinnable odds.”
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