Cannabist: the orders go in, and the consent question goes away

When this matter was last written about, the Maryland sale had a hole in it. Among the assets going across to Free State Botanicals were a management services agreement and a purchase option over a dispensary, neither assignable without the counterparty's consent; the monitor had flagged that the consent might not come; and on August 17 Philip Goldberg — who founded the business Cannabist bought in 2021 — swore an affidavit saying his companies' position was that Maryland's regulator may now treat the structure itself as unlawful.

The motion was heard the next day. Justice Conway approved both transactions and signed four orders with immediate effect, per Endorsement of Justice Conway, Aug. 18, 2026, para. 10.

What was approved

The Remaining States Transaction sells the businesses in Colorado, Illinois, Massachusetts, New Jersey and West Virginia to Vireo Health of Arcadia, LLC for aggregate consideration of $35 million, under a purchase agreement dated July 19, 2026. The structure is a mixture of equity and asset sales with staggered closings, and the buyer assumes the liabilities attaching to the transferred assets other than the excluded ones, per Endorsement of Justice Conway, Aug. 18, 2026, para. 4 and Remaining States Sale Approval Order, Aug. 18, 2026, p. 1.

"A mixture of equity and asset sales" is visible in the order itself, which approves two limbs: the sale to Vireo of the issued and outstanding equity of the entities listed in one schedule, and the sale of the transferred assets belonging to the entities listed in another. Which states move as companies and which move as assets is a function of what each licence regime will tolerate, and the order accommodates both in a single instrument, per Remaining States Sale Approval Order, Aug. 18, 2026, p. 1.

The Maryland Transaction is an asset purchase for $13.75 million plus assumed liabilities, with the Free State Botanicals entities taking the operating assets between a cultivation buyer and a dispensary buyer, and the Frederick cultivation property going separately to 6797 Bowman Frederick LLC, per Endorsement of Justice Conway, Aug. 18, 2026, para. 5 and Sale Approval Order (Maryland), Aug. 18, 2026, p. 1.

The findings the court did not have to make twice

Neither transaction came from a fresh marketing effort, and the endorsement leans on that. Both are products of the same sale process Justice Dietrich examined when she approved the sales of the Virginia, Ohio and Delaware businesses, and Justice Conway quotes her April 15, 2025 endorsement describing it as "robust, competitive, and a broad canvassing of the market over a lengthy period of approximately eight months" — a process itself informed by discussions begun in mid-2024 with an ad hoc group of former senior noteholders, debt capital providers and other national multi-state operators, per Endorsement of Justice Conway, Aug. 18, 2026, paras. 2–3.

That is most of the work of a s. 36 approval already done. Justice Conway records that the transactions readily meet the s. 36(3) CCAA factors, the Soundair principles and the SRTX prepack considerations, and accepts the monitor's view that transactions continuing the business as a going concern are better for stakeholders than anything a liquidation would achieve, per Endorsement of Justice Conway, Aug. 18, 2026, para. 7.

Two housekeeping rulings travel with the approvals. Columbia Care LLC is added as an applicant now, with further subsidiaries to be added as each closing occurs — companies already covered by the stay, and each satisfying the requirements to be an applicant. And the ancillary orders carry releases whose scope Justice Conway finds consistent with those Justice Dietrich approved, appropriately tailored, and compliant with the Lydian criteria, per Endorsement of Justice Conway, Aug. 18, 2026, paras. 8–9.

"There is no opposition"

Paragraph 6 disposes of the Maryland problem in a sentence and a footnote. The transactions are supported by the monitor, the special committee and the senior noteholders, and there is no opposition. The footnote records that Sugarloaf Holdings LLC and Sugarloaf Enterprises LLC filed the Goldberg affidavit, that they do not oppose, and that counsel confirmed the contracts in question in the Maryland transaction will either be assigned on consent or the parties will return to court for an order on a future motion, per Endorsement of Justice Conway, Aug. 18, 2026, para. 6 and n. 1.

Read against the affidavit filed the day before, the footnote is doing something precise. Mr. Goldberg's evidence was never that the price was wrong or the process flawed; it was that assigning the management agreement and the option might cause the Maryland Cannabis Administration to revoke the dispensary licence underneath them, per Responding Affidavit of Philip Goldberg, sworn Aug. 17, 2026, paras. 8–10. That is not an objection to a sale approval. It is a warning about what happens after one.

So the sale went in as drafted and the two agreements were lifted out of the argument. Whether they move at all is now a matter for consent or a later motion, and the regulatory question sitting under them — whether a Maryland licence survives the assignment of the agreements it depends on — was not answered on August 18 and did not need to be.

There is a limit being marked here, quietly, in a footnote. An Ontario judge can approve the transaction, vest the assets and release the claims against them. Whether a Maryland regulator will accept the buyer of a Maryland dispensary is not within the gift of the Commercial List, and the parties structured around that rather than asking.

Who appeared

Stikeman Elliott for the applicants, with Weil, Gotshal & Manges as U.S. counsel; Goodmans for the ad hoc committee of senior secured noteholders; Buchalter for East West Bank; Dentons for the Sugarloaf entities; DLA Piper for Vireo; and Torys for FTI Consulting Canada Inc., which continues as monitor, per Endorsement of Justice Conway, Aug. 18, 2026, participant information.