THC BioMed: the charge that outlived the CCAA

John Miller swore his first affidavit on April 15, 2026. The next day the landlords of the Kelowna facility told THC BioMed Ltd. that because the rent due on April 17 would not be paid, it would be locked out on April 17. On the morning of the 17th the company filed a notice of intention to make a proposal under s. 50.4(1) of the BIA, and the petition filed the same day notes that the affidavit had been sworn before the landlords decided and "does not fully reflect the immediate need to file an NOI prior to the Court hearing the petition for the Initial Order," per the Petition for CCAA, Apr. 17, 2026, paras. 9–11.

Four and a half months later, on August 31, 2026, Justice Baker wound the proceeding up. No plan was filed, no proposal put, no claims process run, no creditor class voted, and the company's pre-filing debts stand where they stood in April. The monitor's own report says as much: the conclusion of the proceedings is "atypical, the Company is not seeking to compromise any liabilities arising prior to the commencement of these proceedings or otherwise impair the rights and remedies of its creditors," so that on the earlier of the monitor's certificate and the end of the stay, "creditors will no longer be stayed from exercising any rights and remedies available to them," per the Third Report of the Monitor, Aug. 31, 2026, para. 19.

The reason a company would want that is in the affidavit sworn five days earlier. On August 10, 2026, counsel for the Canada Revenue Agency told the company that the CRA "would not continue to negotiate a payment plan while the CCAA Proceedings were ongoing," and that if THC wanted an arrangement of the kind it had been seeking, "it must first exit its CCAA Proceedings and negotiate directly with CRA's regular collections group," per Fifth Affidavit of John Miller, sworn Aug. 26, 2026, para. 21.

Two licences and a tax bill

THC BioMed cultivates, processes and sells cannabis from a federally licensed facility on Acland Road in Kelowna, selling across Canada and into international markets. Its directors and officers are John Miller, the chief executive, and Hee Jung Chun, the president, per the Petition for CCAA, Apr. 17, 2026, paras. 4, 13. To operate it needs two authorizations: a cannabis licence from Health Canada under the Cannabis Act, and an excise licence from the CRA under the Excise Act, 2001. Both are, in the petition's word, effectively non-transferable — they move only by a fresh application or by a sale of the company's own shares, per the Petition for CCAA, Apr. 17, 2026, paras. 21–23, 28.

The arrears that brought the case are owed to the regulator that issues one of those licences. The petition put them at approximately $3,345,000 as at March 23, 2026; the fifth affidavit gives the CRA's own figure as $3,141,854.41 as at June 10, 2026 — $2,606,980.80 of excise duties, $280,593 of employee source deductions and $254,280.61 of GST, per the Petition for CCAA, Apr. 17, 2026, para. 25 and Fifth Affidavit of John Miller, sworn Aug. 26, 2026, para. 19. The agency, substantially an unsecured creditor, had restricted the excise licence to month-to-month renewals, garnished the bank accounts, issued requirements to pay to customers, and registered caveats against the owned units, per the Petition for CCAA, Apr. 17, 2026, paras. 6, 26. Mr. Miller's account of the collapse is one sentence long: largely because of the garnishments and the requirements to pay, by mid-April the company could not make the weekly lease payments on six units, or the monthly payments keeping the excise licence renewed, per Fifth Affidavit of John Miller, sworn Aug. 26, 2026, para. 6. The petition attributes the underlying weakness to an over-saturated market and a burdensome tax regime, per the Petition for CCAA, Apr. 17, 2026, para. 5.

Against that, the secured debt was small: $335,000 to Sharons Credit Union and $50,000 to CNR Investments Inc., each on a general security agreement and a mortgage over the owned units, and about $4,600 to Vault Credit Corporation on an equipment lease. Trade arrears ran to roughly $850,000. The largest number was owed inside the family — unsecured intercompany debt of $16,920,103.89, which the company said it intended to discuss with the monitor, including possible subordination or compromise, per the Petition for CCAA, Apr. 17, 2026, paras. 37–38. That discussion did not happen either.

What the four months bought

On April 21 the court continued the NOI proceedings under the CCAA pursuant to s. 11.6, appointed MNP Ltd. monitor, stayed proceedings to May 1, approved an administration charge of $150,000, an interim lender's charge of $75,000 and a directors' charge of $75,000, and directed that the status quo of the licences be preserved through the initial stay, per Fifth Affidavit of John Miller, sworn Aug. 26, 2026, para. 8 and the Initial Order, Apr. 21, 2026. The amended and restated initial order of May 1 extended the stay to August 14 and raised the interim lender's charge to a maximum principal of $525,000, funded by 2011329 Alberta Ltd. on a commitment letter dated April 13, 2026, per the Amended and Restated Initial Order, May 1, 2026, paras. 16, 34–38.

The company had two goals, and the affidavit is direct that neither was a restructuring in the usual sense: a long-term payment plan covering the whole of the CRA arrears, and an extension of its leases. "As such," Mr. Miller deposes, "THC Ltd. did not pursue a claims process or a plan of arrangement in order to be as efficient with costs as it could," per Fifth Affidavit of John Miller, sworn Aug. 26, 2026, para. 13.

On the second goal it succeeded. The company leases six of the nine units that make up the facility from LH Bros Enterprises Inc., and at the filing was facing immediate eviction with no prospect of renewal; by late August the parties were aligned on a five-year renewal and were finalizing the paperwork, per Fifth Affidavit of John Miller, sworn Aug. 26, 2026, paras. 22–23. Realization amounted to one strata unit. Also on May 1, Justice Loo approved the sale of Unit 15 – 2550 Acland Road under a contract dated November 24, 2025 — five months before the filing — with the price sealed in a confidential supplement, per the Sale Approval and Vesting Order, May 1, 2026, para. 2 and the Sealing Order, May 1, 2026. It closed in May, and the net proceeds went into trust with MLT Aikins, where $262,663.44 remained on August 28 after professional fees billed to August 7 had been paid, per the Monitor's Closing Certificate, May 8, 2026 and the Third Report of the Monitor, Aug. 31, 2026, para. 4.

The month the officer had to apply

By August the facility was borrowed out — the company had fully drawn the $525,000, leaving nothing available, per the Third Report of the Monitor, Aug. 31, 2026, para. 5 — and the debtor had decided it did not want the stay extended. Mr. Miller deposes that the company thought an extension unnecessary because most creditors were negotiating in good faith, that the costs of continuing would be disproportionate, and that it instructed its counsel not to seek one, adding: "This was not an unwillingness to restructure, or a failure to act in its view," per Fifth Affidavit of John Miller, sworn Aug. 26, 2026, paras. 14–16.