Massive Hash Factory: the closing payment that grew

In mid-January 2026, each of three cannabis producers owned by a TSX Venture Exchange issuer trading as HASH received a letter from the Canada Revenue Agency. The companies had missed monthly payments under the excise regime, the letters said, and their cannabis licences would be renewed only to February 28 if they paid every monthly amount in full and set up a plan for their arrears; if those conditions were not met by February 15, the agency would attend at their facilities to "reconcile and dispose of the remaining inventories of cannabis and cannabis excise stamps," according to the First Affidavit of W. MacDonald, Feb. 25, 2026, paras. 53–54, 56. The three were Massive Hash Factory Ltd., a solventless concentrates maker in Rocky View County, Alberta; ANC Inc., which began as a contract pre-roll manufacturer in Edmonton and had 87 employees; and CannMart Inc., a Toronto distributor that had moved into manufacturing. As of February 23 they owed the agency $10,736,695.63 between them in excise duty, GST/HST and source deductions, after making tax payments of approximately $11.5 million during 2025. William MacDonald, a director of each company, deposes that excise duty runs at 30 to 40 per cent of gross revenue for many licensees, and that the companies' tax burden, in particular the agency's enforcement actions, was the immediate catalyst for their liquidity crisis, per the First Affidavit of W. MacDonald, Feb. 25, 2026, paras. 15–19, 43, 49–51.

Mr. MacDonald "co-founded a company called Simply Solventless Extractions Ltd. on July 10, 2020, which changed its name to Simply Solventless Concentrates Ltd. on August 24, 2020," he deposes. The business went public on the TSX Venture Exchange by reverse takeover in December 2023, bought CannMart in September 2024, ANC in October 2024 and a fourth producer, Humble Grow Corp., in February 2025, and in 2024 appeared on the exchange's list of its 50 top-performing companies, per the First Affidavit of W. MacDonald, Feb. 25, 2026, paras. 7–12, 45. Justice Feasby granted the three producers protection under the CCAA on February 27, appointed MNP Ltd. as monitor, and extended the stay to the parent and to Humble, neither of which filed, per the Fourth Report of the Monitor, Aug. 31, 2026, para. 2.

The monitor's sale process drew three bids by May 8, and only the interim lender's, from 1001546386 Ontario Inc., was judged worth pursuing, per the Third Report of the Monitor, June 17, 2026, para. 15. On June 18 Justice Mah approved it by reverse vesting order: the purchaser subscribes for new shares in all three companies, the existing shares are cancelled without payment, and the excluded assets, contracts and liabilities vest in 2824690 Alberta Ltd., per the Approval and Reverse Vesting Order, June 18, 2026, paras. 3, 9. The applicants chose the structure to keep their Health Canada and CRA excise licences, which they described as difficult or impossible to transfer, and their tax pools; their brief acknowledged that the transaction would not see any recovery for unsecured creditors, per the Bench Brief of the Applicants, June 9, 2026, paras. 3, 14–15, 19.

The price came in three parts. The purchaser would release the interim loan, fully drawn at $1.5 million, as a credit bid, and pay the monitor cash for the CCAA Process Expense Amount, estimated at $300,000, and for Priority Payables, estimated at $600,000; the outside date was September 30, 2026, per the Third Report of the Monitor, June 17, 2026, paras. 17, 32 and the Affidavit of W. MacDonald, June 8, 2026, para. 17. The June order extended the stay to the same day. Ten weeks after the approval, the transaction has not closed. On August 28 Mr. MacDonald affirmed that the estimate of the cash, which his affidavit calls the Required Closing Payment and defines as any outstanding amounts secured by the administration charge plus any Priority Payables, has increased since the order was granted, and that the purchaser is working to have enough money to cover it. The parent is one of the purchaser's lenders, alongside Jeff Swainson, a director of the parent, and 2697306 Ontario Ltd.; it has been raising money by private placement, more slowly than expected because of delays in filing its 2025 annual financial statements, which he says have now been filed, per the Affidavit of W. MacDonald, Aug. 28, 2026, paras. 15–17. The application asks for the stay to run to November 30 so the purchaser can gather "the unexpectedly high Required Closing Payment," per the Application (Stay Extension), Aug. 28, 2026, para. 14.

The loans behind the interim lender

The purchaser's own funding came into the record the day before the approval hearing. The monitor's Third Report disclosed that the $1.5 million interim facility had been funded through loans to 1001546386 Ontario Inc., evidenced by promissory notes: $500,000 from the parent, $100,000 from Mr. Swainson and $900,000 from 2697306 Ontario Ltd., whose sole director appears from a corporate search to be Michael Weingarten, who is also the sole director of the interim lender, per the Third Report of the Monitor, June 17, 2026, paras. 18–19. The notes referred to a restructuring support agreement among those four, which the monitor says it first saw on June 16. If the transaction closes, that agreement has the purchaser transfer the ANC shares, the excluded CannMart assets and the Massive Hash Factory assets to the parent, in exchange for the parent assuming what the agreement calls the DIPCo Indebtedness, and then transfer the CannMart shares to 2697306 Ontario Ltd. for $1.00. Mr. Swainson is contractually bound to support the transaction, per the Third Report of the Monitor, June 17, 2026, para. 20.

Because the agreement would move shares and assets back to the parent after closing, the monitor became concerned that it might engage subsections 36(4) and (5) of the CCAA, the provisions that govern a sale to a person related to the debtor. The applicants' position was that it did not, and they had not disclosed it to the monitor on that basis. The monitor said it had not had time to decide the point, weighed the s. 36(4) factors regardless, and recommended approval: the sale process had been commercially reasonable, the consideration was superior to the other offers, every employee would keep a job, and good-faith efforts had been made to sell to unrelated parties, Mr. Swainson having signed the support agreement only after the interim lender was selected as successful bidder, per the Third Report of the Monitor, June 17, 2026, paras. 21–23. The support agreement and the monitor's summary of the offers are sealed until the proceedings terminate or the court orders otherwise, per the Sealing Order, June 18, 2026, paras. 8–9.

What the agency asked for

Humble's own tax position surfaced the same week. On or about June 11 the monitor learned that Humble had pre-filing excise arrears of approximately $330,000, and on June 16 that it owed approximately $325,000 in pre-filing GST/HST. The agency then questioned the group's consolidated cash-flow forecasts and sought confirmation that no money had flowed from Humble or the parent to the three applicants without a legitimate basis; the monitor understood its concern to be that funds that should have paid Humble's arrears had been used by the applicants during the proceedings. Management told the monitor that transfers within the group were in the normal course or for shared services. The monitor did not verify that independently, saying forensic work "would be extensive and costly," and from June on the forecasts were prepared in two halves, per the Third Report of the Monitor, June 17, 2026, paras. 37, 39–40.