Sirona Pharma: the licence could not be sold, so the company was

An asset sale moves things. A licence is not a thing that moves.

Sirona Pharma Inc. holds the two authorisations required to run a cannabis cultivation, distribution and sales business: a Health Canada licence, number LIC-JQ4LJEOMDX-2023-17, and Excise licence number 76005 6721 RD0001, per Brief of the Monitor, July 6, 2026, para. 7.

On September 11, 2025 Health Canada suspended the licence, and the applicants ceased operations, per Brief of the Monitor, July 6, 2026, para. 6. The CCAA proceedings followed in November.

Eight months, and the licence comes back

The single fact that made a sale conceivable arrived in the spring: on or about May 6, 2026, Health Canada reinstated the licence, per Brief of the Monitor, July 6, 2026, para. 12.

Two weeks later the shape of the proceeding changed. On May 20, 2026, Justice Lema granted an order approving a sale and investment solicitation process — and, more consequentially, significantly expanding the Monitor's powers, directing that it would have full power and authority to implement and supervise the process. Following that order the Monitor took control of the management and supervision of the applicants outright, per Brief of the Monitor, July 6, 2026, paras. 13–14, 16.

By then the court-ordered charges standing against the estate ran to five, in this priority: the administration charge to a maximum of $500,000, an interim financing charge to $825,000, a second DIP charge to a maximum principal of $100,000, a directors' charge to $100,000, and a KERP charge to an initial maximum of $30,000, per Brief of the Monitor, July 6, 2026, para. 15.

What the market said

The Monitor initiated the process on May 25, 2026. The record of what it did is specific, and worth reading as a measure of the market rather than of the effort:

• a teaser distributed to over 113 strategic investors, competitors and liquidators
• the opportunity advertised in the Globe & Mail and other publications
• nine distinct parties signed a non-disclosure agreement and entered a virtual data room, with diligence requests answered and access to the facility itself facilitated

per Brief of the Monitor, July 6, 2026, paras. 17–18.

The offer deadline was June 24, 2026. Three offers arrived, and the Monitor deemed all three non-competitive or non-viable, per Brief of the Monitor, July 6, 2026, para. 19.

Then a late one. On June 26 an interested party submitted an offer after the deadline; on June 27 the Monitor found it not viable in its initial form and told the offeror what revisions would make it acceptable; on June 28 the offeror said it could not accept those revisions and withdrew, per Brief of the Monitor, July 6, 2026, para. 20.

On June 29, Conex — the second DIP lender under the SISP order — advised the Monitor of its imminent intention to bid for Sirona Pharma, per Brief of the Monitor, July 6, 2026, para. 21.

That is the sequence the court is asked to accept as a market test: a wide canvass, nine serious lookers, nothing viable from any of them, and the lender already inside the capital structure stepping forward at the end. The Monitor's own conclusion is put in the careful double form these reports use — Conex's offer was the highest and best viable offer resulting from the process, and "likely represents the best value realistically obtainable from the SISP or any alternative sales process", per Brief of the Monitor, July 6, 2026, para. 25.

Why it has to be a reverse vesting order

The transaction is Conex acquiring 100% of all issued and outstanding securities of Sirona Pharma. Not its assets — the company.

That choice is the licence. An asset sale would leave the buyer holding cultivation equipment, land and inventory, and requiring Health Canada to issue it a licence of its own. Keeping the licensed entity alive and changing who owns it avoids that entirely, and the agreement is drafted to say so: it is conditional on the court granting the reverse vesting order, but not conditional on financing, on further diligence, or on any governmental authority's prior approval of the transaction, per Brief of the Monitor, July 6, 2026, para. 26.

Consideration has four parts: a cash payment, a credit bid for the value of the second DIP charge debts owing to Conex, payment of certain contract cure costs, and Sirona Pharma's post-closing retention of certain liabilities — which include, without limitation, all liabilities owing in connection with the Health Canada licence, per Brief of the Monitor, July 6, 2026, para. 26.

That last clause repays attention. A reverse vesting order exists to strip unwanted obligations out of a company and leave the good part standing. Here the obligations attached to the licence are deliberately left inside — because they are what the licence sits on, and severing them would put at risk the only thing being bought.

The mechanics the proposed order carries

The order the Monitor filed on July 6 is not yet made; it stands as a proposed form. What it provides, per Approval and Reverse Vesting Order (draft, filed July 6, 2026) and Brief of the Monitor, July 6, 2026, para. 28:

1. a mechanism cancelling all current issued and outstanding securities of Sirona Pharma; 2. the transfer and vesting of all the company's right, title and interest in the excluded contracts, excluded assets and excluded liabilities into a Residual Co. designated by the Monitor; 3. the expungement from Sirona Pharma's assets of every claim, charge, interest and encumbrance other than permitted encumbrances; and 4. a deemed charge impressed on Residual Co. in favour of every holder of an expunged claim, carrying the same attributes, rights and priorities that holder would have had against Sirona Pharma at closing.

Point four is the answer to the obvious objection. A creditor whose security is expunged from the operating company does not simply lose it; it is reconstituted against the residual entity in the same rank it held before. Whether that is worth the same in practice depends entirely on what ends up in Residual Co., which is the argument such orders always turn on.

One further term is worth noting for what it excludes. Subject to the order being granted, the agreement authorises the Monitor to use all or part of the deposit to maintain the equipment, lands and licences of Sirona Pharma — but not the professional costs of the CCAA proceedings, per Brief of the Monitor, July 6, 2026, para. 27. The buyer's money keeps the licence alive; it does not pay the lawyers.

Also before the court

Two other things sit on the same docket in the same week, and only their existence is reported here. On July 7 the Monitor filed a proposed order dealing with an extension, the administration charge and approval of its conduct, per Order (Extension, Administration Charge, Approval of Conduct) (draft, filed July 7, 2026). On July 8 an application was brought to discharge the chief restructuring officer, Gord Boersma, per Application — Discharge of CRO, Gord Boersma, July 8, 2026 — and on July 9 Mr. Boersma filed a brief of law of his own, per Brief of Law of Gord Boersma, July 9, 2026.

A restructuring officer filing argument on the subject of his own discharge is unusual enough to note. What he says in it is not summarised here, because this piece has not read it.

Ten months from a suspended licence to a proposed sale of the licensee. The business has not operated since September; the authorisation that makes it a business came back in May; and the instrument on the table asks to keep the company and move everything it owes into another one.