Cannabist: two deeds in lieu, and a stay sought to March 2027

The property at 51 West Park Avenue in Vineland, New Jersey, secured a loan on which Columbia Care NJ Realty LLC, with The Cannabist Company Holdings Inc. as guarantor, owed East West Bank approximately US$15,894,384 at the end of 2025. A stipulation with the bank, dated June 12, gave the group until August 15, extendable a month at a time for as long as it kept paying principal and interest, to sell the property or tell the bank it would leave, and the bank waived any deficiency claim once the property was disposed of, per the Fourth Report of the Monitor, June 16, 2026, paras. 16(b), 21(c). On September 21, 2026, the group transferred the property to East West Bank by a deed in lieu of foreclosure, with the fixtures and equipment then remaining on the premises; the New York property, at 5784 Sound Avenue in Riverhead, had gone the same way on July 1, and under the stipulation both transfers were in full satisfaction of the mortgages, per the Sixth Report of the Monitor, Sept. 22, 2026, paras. 24–25. The Riverhead loan had stood at approximately US$18,410,257 at the end of 2025, per the Fourth Report of the Monitor, June 16, 2026, para. 16(a).

Both transfers are recorded in the Sixth Report of FTI Consulting Canada Inc. as monitor, dated September 22 and filed on the applicants' motion to extend the stay of proceedings from September 30, 2026 to March 31, 2027. The same motion asks the court to raise the limits on sales of redundant or non-material assets and to extend that power to the group's subsidiaries, to let the parent company put off its annual general meeting until the proceeding is over, and to approve the fees of the monitor and its counsel, per the Sixth Report of the Monitor, Sept. 22, 2026, para. 12. The extension is sought, as the monitor puts the applicants' purpose, to give the group "continued breathing space and sufficient liquidity while it continues to advance the various sale transactions, sells remaining assets of the business and winds down its remaining markets," per the Sixth Report of the Monitor, Sept. 22, 2026, para. 36.

When this matter was last reported here, on August 18, Justice Conway had approved the $35 million sale of the Colorado, Illinois, Massachusetts, New Jersey and West Virginia businesses to Vireo Health of Arcadia, LLC and the $13.75 million sale of the Maryland business to Free State Botanicals, per the Endorsement of Justice Conway, Aug. 18, 2026, paras. 4–5. The group and the monitor are still working toward the closing conditions for both, regulatory approvals among them, per the Sixth Report of the Monitor, Sept. 22, 2026, paras. 18(p), 19(j). The Ohio sale, approved four months before them, has closed.

Ohio, after the regulator

Holistic Industries Inc. signed the equity purchase agreement for the Ohio business on March 23, 2026: a closing cash payment of US$34,500,000, subject to adjustments for cash, working capital, debt and transaction expenses, plus a $12.5 million seller promissory note. Closing depended on the Ohio Division of Cannabis Control approving the transfer of ownership, and the outside date was November 30, 2026, per the Second Report of the Monitor, Apr. 10, 2026, para. 23. Justice Dietrich approved the sale on April 15, per the Ohio Sale Approval Order, Apr. 15, 2026, para. 3. It closed on September 2, "following receipt of the required regulatory approval," and the proceeds were paid into a Canadian account held by the indenture trustee under the senior notes, acting as escrow agent, "to redeem and satisfy the Senior Notes on a dollar-for-dollar basis," per the Sixth Report of the Monitor, Sept. 22, 2026, para. 10.

The closing brought in a fifth applicant. Green Leaf Medical of Ohio III, LLC, which had owned the equity of one of the companies sold, was added under the terms of the Ohio approval order, per the Sixth Report of the Monitor, Sept. 22, 2026, para. 10. The monitor had described the device in April: as sales close, the subsidiaries whose assets have been sold may be made applicants "to provide an efficient mechanism to effect distributions to creditors and wind-down the applicable Subsidiary," per the Second Report of the Monitor, Apr. 10, 2026, para. 24(e).

The Vireo purchase is moving through an interim structure while state regulators consider it, with management services agreements or interim consulting agreements between the sellers and the buyer. The Colorado management services agreement and interim consulting agreement, and the West Virginia interim consulting agreement, took effect on August 29, 2026; the management services agreements for New Jersey and Illinois await regulatory approval in those states, per the Sixth Report of the Monitor, Sept. 22, 2026, para. 27. Both the group and the monitor report continuing discussions with U.S. cannabis regulators about items arising in the context of the Vireo agreement and the Maryland Transaction. The U.S. Bankruptcy Court for the District of Delaware, which hears the Chapter 15 case, on August 19 recognized the Distribution Order, the April 15 release order for the Delaware and Ohio sales, and the release order that came with the Vireo approval; recognition of the Maryland release order will be sought to the extent needed to give it effect in the United States, per the Sixth Report of the Monitor, Sept. 22, 2026, paras. 18(l), 19(c), 32–33.

The noteholders' account

The monitor describes the supporting noteholders as "the senior secured creditors and largest economic stakeholders of the Applicants," per the Sixth Report of the Monitor, Sept. 22, 2026, para. 38(d). At filing they were owed approximately US$178,993,000, after $97 million from the pre-filing sale of the Virginia business was paid to them on February 13, 2026: 9.25% notes of $166,262,000 and 9.0% convertible notes of $12,731,000, both due December 31, 2028, per the Pre-Filing Report of the Proposed Monitor, Mar. 24, 2026, para. 26(f), (n). In May the monitor told the court that they were not expected to recover the full amount of their claims, which made them the fulcrum creditor, per the Third Report of the Monitor, May 19, 2026, para. 31(c).

The Distribution Order, granted on May 25, puts the support agreement's payment terms into effect. Sale proceeds go to an escrow agent, which pays priority payables, releases to the group whatever amount the applicants, the monitor and the requisite supporting noteholders agree in writing, and sends the rest to the indenture trustee; separately, cash the group holds above a threshold set in the support agreement is released to the trustee from time to time until the notes are paid in full, per the Third Report of the Monitor, May 19, 2026, paras. 29–30. In September, under that order and with the monitor's consent, the parent company directed the escrow agent to release US$26,603,510.88 to the indenture trustee to partially redeem both series of notes. The trustee confirmed receipt on September 11, and the funds are payable on September 28, 2026, per the Sixth Report of the Monitor, Sept. 22, 2026, para. 26.