Canadian cannabis retail chain Four20 Premium Markets, one of the largest dispensaries in Alberta, has announced plans to file for bankruptcy.
The parent companies of the 35-store retail chain, 420 Premium Markets Ltd., 420 Investments Ltd. and Green Rock Cannabis, filed a ‘notice of intent’ to file for bankruptcy under.
According to Stratcann, the notice was filed on May 29, 2024, following an extended and costly legal battle with Tilray.
Tilray, aiming to acquire Four20 in 2019 for around $110 million, pursued litigation against Four20 when the deal fell through.
In response to Tilray’s legal action, Four20 filed a claim in 2020 seeking $110 million plus $20 million in damages, alleging that Tilray acted in bad faith by terminating the acquisition agreement.
Court documents reveal a complex legal back-and-forth, including Tilray subsidiary High Park’s counterclaim for $7 million plus interest, which was granted summary judgment in February 2024.
Four20’s attempts to challenge this judgment, including an appeal and request for an interim stay, were ultimately unsuccessful. The judge ruled that Four20 had not shown it would suffer irreparable harm and emphasized the importance of repaying the borrowed funds.
The bankruptcy filing follows a court ruling that Four20 must repay a bridge loan and associated costs of $9.8m to Tilray subsidiary High Park Shops, which was created specifically for the acquisition.
In July 2023, the now insolvent Canadian cannabis company Trees announced a plan to pursue a reverse takeover of 420 Investments, but ultimately backed out of the deal months later.
