Entourage Health Corp (CVE: ENTG) (OTCMKTS: ETRGF) (FRA: 4WE0) has decided it is in the company’s best interest to go private. The Canadian cannabis operator initiated this process in December and received shareholder approval for it on Friday.
Two parties with ties to the LiUNA Pension Fund of Central and Eastern Canada will pay half a cent for the cultivator’s issued and outstanding shares. There are approximately 142.5 million, thereby making the deal worth a modest sum of about C$712,500.
The process is expected to be wrapped up by the end of this month. It comes as a result of recent financial struggles and overspending.
At the end of Q3, Entourage reported having a working capital deficit of C$171.4 million and total losses amounting to C$390.5 million. Additionally, the company has been burdened with C$167.6 million in debt to its LiUNA affiliate lenders and has been defaulting on payment obligations.
“After thorough evaluation, the Special Committee is confident that the proposed transaction offers the most favourable outcome for the company and its shareholders in light of current challenges,” Board Member Jason Alexander said on Dec. 30.
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Entourage rolls joints at warp speed despite financial turmoil
The struggling cannabis operator is now capable of producing 2 million doobies per month at its facility in Aylmer, Ontario. It achieved this rate of production in mid-2024.
The employees have an advanced automated system set up for mass production of marijuana cigarettes at the 26,000-square-foot complex. The company’s Dime Bag brand has been driving revenue for Entourage in this regard, despite setbacks.
“Initiatives like the launch of our Dime Bag value brand are helping us address evolving consumer needs,” CFO Vaani Maharaj said at the end of November.
The pre-roll segment of Canada’s market has grown by about 94 per cent over the past three years, significantly driven by the popularity of extract infused joints. A report released by Custom Cones USA in February found that pre-rolls should overtake flower in the Canadian market by the end of this year.
In addition to massive pre-roll bundles, Entourage currently sells flower, concentrates, vaporizers, THC-infused munchies and topicals.
rowan@mugglehead.com
