Humble & Fume Inc. (CSE: HMBL) (OTCQX: HUMBF), a major North American cannabis distributor, has invoked the Companies’ Creditors Arrangement Act (CCAA) to tackle liquidity challenges and stabilize operations.
The Toronto-based company and its subsidiaries, including B.O.B. Headquarters and Windship Trading, have secured a temporary stay of proceedings until January 15. Deloitte Restructuring Inc. is the Court-appointed monitor. The Humble Group plans to return to court on January 12, 2024, seeking approval for a sale and investment solicitation process.
Humble & Fume faces financial challenges, reporting a net loss of C$25 million for the year ended June 30, 2023. The company attributes its current situation to excessive focus on accessories revenue growth over profitability. This in turn led to the accumulation of slow-moving and unpopular inventory. Despite efforts to right-size the workforce and footprint over 18 months, the company is now insolvent.
Strategic adjustments
The decision to seek creditor protection under the CCAA comes after careful consideration by the company’s directors, who believe it is in the best interest of the Humble Group. The court proceedings aim to provide a shield against the financial difficulties, allowing the company to navigate its liquidity issues.
Humble & Fume expressed confidence in having sufficient liquidity to manage the CCAA Proceedings without the need for additional financing at this time. The company aims to facilitate a transaction that enables the Humble Group to emerge from the proceedings. With over 20 years of North American operating experience, Humble & Fume is a key player in the cannabis distribution sector. The company caters to retailers, licensed producers, and consumers.
The Humble Group’s journey through the CCAA Proceedings will unfold with a crucial hearing scheduled for January 12. The outcome will determine approval of the sale and investment solicitation process, shaping the future trajectory of Humble & Fume Inc. As the story develops, stakeholders and industry observers will be closely watching for updates on the company’s efforts secure a path forward.
zartasha@mugglehead.com
