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Written by Kieran Delamont, Associate Editor, London Inc.
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Indiva in creditor protection
London cannabis producer Indiva and its subsidiaries under Indiva Group announced this week that it has obtained creditor protection as looks to restructure its business, marking them as the latest major Canadian cannabis company to seek relief under bankruptcy laws. “Due to, among other things, the fragmentation of the cannabis industry, financial underperformance and pressures resulting from obligations owing to creditors, the Indiva Group has incurred cumulative losses,” a company statement reads. The company said it intends to seek court approval to sell its business and assets to Alberta-based cannabis and liquor retailer SNDL Inc., an existing creditor and one of its larger stakeholders. The SNDL offer will act as stalking-horse bid for other potential buyers, and it’s expected that the company will continue to operate in the interim.
The upshot: Spark one up for Indiva, which held out a lot longer than some of its market contemporaries before the financial problems rampant in the sector finally sent them into creditor protection. The underlying causes are familiar: the cannabis market has not produced the profitability or demand that was forecast pre-legalization; the tax and regulatory structure has been tough on cannabis companies; and many of the early entrants simply overinvested and are now being burned. In April, Indiva revealed that it had accumulated deficits of $71.6 million, and negative working capital of $2.2 million. SNDL could pick up some valuable assets here though ― Indiva has long been the national leader in the edibles sector and has a few brands that will be worth maintaining. “It is expected that the Indiva Group will emerge from creditor protection as a stronger company, with a healthier balance sheet,” the company said.
Read more: MJBiz Daily | Businesswire
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Swift “no thanks” to Farhi opens the door to questions about a new city hall
The city is considering long-term plans to renovate and expand its city hall campus, and this week a proposal was brought forward to the city to buy three buildings from Farhi Holdings Corporation and relocate city hall to Richmond Street, between Dundas and King streets (rendering pictured). “City hall brings somewhere between 500 and 1,000 people to work on a daily basis. What better place to bring those people than to the centre of your downtown?” said John Fleming of consultancy firm City Planning Solutions, who was pitching the proposal on behalf of Farhi Holdings. The city’s response? Thanks, but no thanks. A council committee went in camera to discuss the deal, and though they didn’t say why, they seemed to distance themselves from the proposal, and voted down a motion that would have delayed the process of examining the future of the existing city hall building at 300 Dufferin Avenue.
The upshot: This isn’t the first time the city and the Farhi Holdings have had a moment on the city hall dance floor. Back in 2010, the city offered $15.5 million to purchase the Farhi-owned 100 Dundas Street (the ‘Bell Building’) for a new city hall. Farhi proposed leasing it to the city instead and no deal was reached. We suppose if nothing else this proposal is a harbinger of a hefty PR task for the city and its relaunched desire for new digs (city council has earmarked $125 million for such a plan and has expressed interest in bringing in a private partner on the development). Lots of questions here, including in this day of remote, hybrid and tele-working, why does city staff need to be under one snazzy new roof? And if the city does need more space, is it not better to absorb some of the troublesome 30 per cent office vacancy in the core? Plus, even if the project is a P3, is now the time to ante up $125 million (which will surely be far more), particularly given the somewhat dismal progress of the Whole of Community System Response to Health and Homelessness file? As Councillor Susan Silverman noted: “This gets to be a little bit of a sales job for us to make this kind of investment in city hall.”
Read more: CTV News London | London Free Press
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SaaS platform Appello expands into U.S. market
Local workforce management SaaS platform Appello, founded by Matt Vanos, Corey Shelson and Ian Haase (pictured), announced this week it had closed a fundraising round and expanded into the U.S. market, with new clients in Georgia, Massachusetts and West Virginia. The fundraising round was led by the 519 Growth Fund and Globalive Capital and will be used to hire technical staff. Of the expansion, Shelson said that it was “a testament to the strong demand for Appello’s unique product offering,” and added that they are “seeing interest from subcontractors across the entire North American market.”
The upshot: The investment round news was in the works when London Inc. profiled Appello earlier this year, and U.S. expansion was very much on their radar. The company also said it has expanded outside the thermal insulation sector, on which they were initially laser-focused, and now work with clients in the sheet metal, plumbing, HVAC and electrical trades. “Many subtrades are struggling with the same issues related to workforce management, project costing and working in regulated environments,” Haase said. “The beauty of the Appello platform is that it has been purpose-built for these companies.”
Read more: Newswire | London Inc.
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City mulls hiking price of industrial land
There could be a bit of a windfall in the wings for the City of London, as they consider whether to hike the price of land in their industrial parks by $100,000 an acre. The price of a lot up to five acres at Innovation Park would rise from $225,000 to $325,000, while larger lots will see their per-acre price rise from $200,000 to $300,000. The impetus for the price hike is the strong demand ahead of the expected 2027 opening of the VW PowerCo plant, which is expected to announce its suppliers by the end of the year. Kapil Lakhotia of the LEDC says he expects around a half-dozen suppliers to set up shop here in town, and that there’s enough demand out there that a price hike shouldn’t soften the market for London’s industrial land. “Demand for industrial land in London and the region is very strong,” Lakhotia told The London Free Press. “The pricing proposal is in keeping with other locations, our competitors.” The proposal heads to city council’s corporate services committee next week.
The upshot: Even with a price hike, city staff said the city remains a desirable place to buy industrial land – pointing to Cambridge and Waterloo as comparative examples, where industrial land can go for between $500,000 and $1 million per acre. (That, and the VW effect, are partly why London’s industrial real estate market has been the nation’s strongest lately.) What the development industry would now like to see is more private industrial land hitting the market. Sean Ford, managing partner at Dancor Construction, estimated that the city needs to triple the amount of private industrial land available in the next few years to meet demand.
Read more: London Free Press
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Aduro Clean Technologies announces closing of private placement
Aduro Clean Technologies, a cleantech firm that utilizes patented water-based technologies to recycle plastic and heavy crude into renewable fuels and other chemicals, announced that it closed a non-brokered $3.5-million private placement this week. “We are extremely pleased with the continued support of our existing shareholders, and welcome our new shareholders,” said Aduro CEO Ofer Vicus. “The strong interest in this offering is a clear demonstration of the positive impact of our growing investor base in Canada and internationally.” The company said it intends to use the investment to fund R&D work, as well as for general expenses.
The upshot: Aduro Clean has been a bit of a sleeper in London’s cleantech sector, but definitely a firm to watch. First launched in Sarnia, they took up local residency in 2022 when they completed work on a Newbold Street lab ― a home for their R2 Plastics reactor technology (pictured). In early 2023, they entered into a three-year research partnership with Western University, and last month they announced “exciting results” in their work on breaking down hard-to-recycle crosslinked polymers (one such material is tire rubber, for example), which they said “solidifies the Aduro pathway into the building materials sector,” as well as “opens the door to very sizeable markets for crosslinked polymers to be recycled.”
Read more: Newswire | Financial Post
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Convertus partners on circular compost pilot project involving food court waste
Local organic waste processor Convertus said on Thursday it had completed a circular compost pilot project which saw its London facility take in food waste from two Toronto malls ― Yorkdale Shopping Centre and Scarborough Town Centre ― and convert it into compost. “At this specialized composting facility, the organic food waste went through a unique in-vessel composting process which slowly converted the food court leftovers into ready-to-use, nutrient rich compost,” the company said. The compost was then shipped back to the mall, where it was mixed into soil and landscaping projects on mall property. Also involved in the partnership was Toronto-based Waste Reduction Group, which handled the food waste between the mall and the London facility. The company says this pilot “demonstrates the possibility of a closed-loop system for organic food waste.”
The upshot: It always seems to come back to Toronto’s trash, doesn’t it? Processing Toronto organic waste into biofuel was a pet project of former mayor Joe Fontana, who tried to pitch former mayor of Toronto Rob Ford on the idea back when Toronto had just started trucking their garbage to the Green Lane Landfill in Southwold Township. That idea never came to fruition (though the Convertus London facility did land the contract for York Region, at least until Convertus completes its planned facility there). But hey, we digress, and as Convertus business development manager Hunter MacPhail pointed out, the food court project demonstrated Convertus’ advanced composting processes and a viable circular composting model for organic waste. “In this amazing pilot program and partnership, we successfully diverted over 60 tonnes of organic waste from the landfill and produced roughly 12 tonnes of useable compost that was applied locally, allowing us to contribute further to environmental sustainability and give resources a new life.”
Read more: Waste Reduction Group
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Dispatch: June 21, 2024
A summary of recent business appointments and announcements, plus event listings for the upcoming week.
View listings here
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