Blizza Brands: CRA's final renewal and a proposal expected by October 19

On May 13, 2026, the Canada Revenue Agency renewed the cannabis excise licence held by Blizza Brands Inc. for the month from May 16 to June 15 and set out its terms as a numbered list. The first read: "The licence is renewed for one (1) month only and constitutes a final renewal, with no assurance of further renewal." The rest required the company to stay current on every filing and payment, let no arrears balance grow and pay something toward its existing excise arrears within the month, per the Affidavit of Linh Diep, June 26, 2026, Ex. "D". On June 15 CRA wrote again. The licence would not be renewed and was cancelled effective June 16, because the company had fallen behind, had made no payment on the arrears and had not shown "sufficient financial resources to conduct business in a responsible manner." An excise duty officer would be on site at 10:00 the next morning "to facilitate the destruction of all cannabis products, plants and seeds on site as well as Excise Duty stamps," per the Affidavit of Linh Diep, June 26, 2026, Ex. "E".

On June 16, according to the affidavit of Blizza's president and director, Manh Linh Diep, CRA registered three liens against the company's building in London, Ontario — $369,645.22 under the Excise Act, $299,129.61 under the Excise Tax Act and $138,947.64 under the Income Tax Act — and its representatives attended, when "certain cannabis inventory, plants and genetics were destroyed," per the Affidavit of Linh Diep, June 26, 2026, para. 30(a)–(b). After urgent discussions that brought in the Department of Justice, CRA extended the licence to June 30 on conditions: no propagating, cultivating, processing or packaging, no stamping or sale of packaged product, no sales to any province or store, $16,000 more in financial security, and every current balance and all arrears paid in full before the licence expired. On or about June 23, CRA issued requirements to pay to the Ontario Cannabis Store and others, and the Bank of Montreal told the company that its main operating accounts were frozen, per the Affidavit of Linh Diep, June 26, 2026, paras. 27, 30(c)–(d) and Ex. "F". Blizza filed a notice of intention to make a proposal under s. 50.4(1) of the Bankruptcy and Insolvency Act that day, with Goldhar & Associates Ltd. as proposal trustee.

Nine thousand square feet on Neptune Crescent

The business, as Mr. Diep describes it, is a federally licensed cannabis cultivator and processor formed by amalgamation in 2021, working out of about 9,000 square feet of indoor cultivation and processing space at 371 Neptune Crescent with eight full-time employees and two contractors. It sells "premium craft cannabis products" through provincial wholesalers, the OCS among them, under brands including VOLO, OP, KWALL, Deep Value and KEFF, and supplies and processes for other participants in the industry. Its Health Canada licence and its CRA excise licence are "among the Company's most significant assets," non-transferable, and without them it cannot lawfully cultivate, process, package or sell, per the Affidavit of Linh Diep, June 26, 2026, paras. 6–11, 16.

The company's account of how it came to owe CRA starts in or around 2024, with "significant deficiencies in its finance and accounting functions" that produced late and inaccurate tax reporting, then audits, assessments and penalties; by the time replacement finance staff were in place, the arrears had accumulated. Excise duty, the affidavit says, "frequently became payable before the Company had collected corresponding receivables from customers," and it adds the industry's regulatory and tax burdens, compressed margins and competition, per the Affidavit of Linh Diep, June 26, 2026, paras. 19–22.

At filing the company estimated its debt to CRA at $599,196.79: $430,011.63 in excise arrears, $139,214.35 in payroll-related obligations and $29,970.81 in GST/HST. Its one secured facility is a first mortgage on the building for a $1,100,000 loan advanced in October 2023 by 0933805 BC Limited and Pierino Alberto Papa, interest-only at 13%, extended year by year and currently maturing October 19, 2026. A receivables facility with Stoke of up to $500,000 had nothing owing. Internal statements at May 31, 2026 showed assets with a book value of approximately $5.4 million, including property and equipment of approximately $2.9 million and inventory of approximately $2.0 million, with about $43,000 of cash and a CRA bond deposit of about $120,000; the company "is both cash flow and balance sheet insolvent," Mr. Diep swears, per the Affidavit of Linh Diep, June 26, 2026, paras. 34–37, 42–47. The proposal trustee's first report puts estimated unsecured obligations, CRA included, at approximately $1.44 million, and records that when the NOI was filed the staff not needed for the Health Canada licence had been laid off, operations had ceased and "management/ownership funded the last payroll personally," per the First Report of the Proposal Trustee, June 28, 2026, paras. 19–20.

What the stay bought

Six days after filing, the company was before the Commercial List asking the court to hold its licences in place for the length of the stay, unfreeze its accounts, allow up to $75,000 of pre-filing payments to critical vendors (flower suppliers, geneticists and intellectual-property providers, as management identified them to the trustee) and grant a $175,000 administration charge. Its factum relied on Tantalus Labs Ltd. (Re), 2023 BCSC 1450, in which a status quo order maintained a cannabis excise licence during NOI proceedings under s. 183 of the BIA, and on licence-preservation paragraphs in the Heritage Cannabis initial order of April 2, 2024 and the Aleafia Health SISP order of August 22, 2023, per the Factum of Blizza Brands Inc., June 28, 2026, paras. 25–30 and n. 27. By then the Department of Justice had confirmed that CRA would renew the excise licence for a period equal to the stay, and CRA had begun withdrawing the 16 requirements to pay it had issued, per the First Report of the Proposal Trustee, June 28, 2026, paras. 28, 40, 45–46.

Justice W.D. Black granted it on June 29, signing the order provided, "which I am advised incorporates input from CRA." The judge was satisfied "that without the relief sought, Blizza will not be able to restructure and that stakeholder value will be destroyed," noted that the one secured creditor supported the motion, and recorded the proposal trustee's undertaking to file CRA's written confirmation, per the Bankruptcy Endorsement Form, June 29, 2026, pp. 1–2. The order preserves the status quo of the CRA excise licence and deems its term extended for the stay, requires Blizza to file its returns and remit post-filing source deductions, sales taxes and excise duty, lifts for the stay every garnishment and freeze arising from pre-filing enforcement, and ranks the administration charge ahead of all other encumbrances except validly perfected security interests of equipment lessors, per the Order of Justice W.D. Black, June 29, 2026, paras. 3–7, 9(c), 12–14. The confirmation arrived the next day as a CRA letter renewing the licence from July 1 to July 31, 2026, with "this and subsequent licence renewals" contingent, through the stay, on a renewal application at least 30 days before each expiry, sufficient financial security and monthly returns filed and paid, per the Supplement to the First Report of the Proposal Trustee, June 30, 2026, para. 11 and App. "B".