March 20, 2023
Opus Consulting and Casner & Edwards Team Completes Financial and Operational Restructuring of Ermont, Inc. in First-of-its-Kind Receivership Sale to Multi-State Operator MariMed, Inc.
BOSTON, MA, March 20, 2023 – Casner & Edwards represented Opus Consulting Partners LLC, the court-appointed receiver to medical cannabis operator Ermont, Inc., in the sale of the company’s business operations and assets to an affiliate of multi-state cannabis operator MariMed, Inc. The history-making transaction is a key milestone in the first-ever cannabis receivership in New England. Attorneys John T. Morrier and Michael J. Fencer led the Casner legal team in representing Opus, with support from members of Casner’s Bankruptcy & Restructuring, Nonprofit Organizations, Real Estate, Employment, and Business & Corporate practice groups.
Approved on March 9, 2023 by the Massachusetts Cannabis Control Commission (CCC), after earlier approval by the Massachusetts Superior Court, the transaction preserves the Ermont jobs and its cultivation and medical dispensary operations. The total consideration for the sale transaction was $13 million, in a combination of cash, stock, and debt. MariMed, which announced the deal closing on March 13, 2023, continues to operate Ermont’s cultivation and medical dispensary operations in Quincy, Massachusetts, now rebranded as Panacea Wellness.
In a press release, Jacques Santucci, president, Opus Consulting, explained, “Competition is increasing, wholesale prices are falling, and more and more cannabis licensees are falling into a state of distress in Massachusetts and other maturing markets. Through the receivership, we were able to streamline Ermont’s operations and procedures, negotiate a restructuring of its debts, maintain jobs, and provide uninterrupted service to medical marijuana patients.”
While this is the first cannabis receivership transaction to be approved by the Massachusetts CCC, and the first cannabis receivership in New England, others are already underway in New England and across the U.S. “Because marijuana remains a Schedule I substance under the US Controlled Substances Act, the doors to the federal bankruptcy courts are closed to businesses engaged in the cultivation, manufacturing, sale, or distribution of cannabis,” said Casner partner John Morrier. Receivership is an alternative state-court process available to struggling cannabis businesses and creditors that allows the business to continue while the receiver restructures its operations and finances.
In a related first, Casner’s team represented Opus Consulting personnel in achieving the CCC’s designation as Preapproved Court Appointees, authorizing them to operate Massachusetts cannabis licenses under court supervision. The Opus team was the first to achieve the designation.
“The receivership process allowed our client, upon appointment by the Court, to step into the shoes of the cannabis licensee,” explained Casner partner Michael Fencer. “The receiver was then fully authorized to continue the business while restructuring its operations and finances. This case shows that the receivership process can preserve value that would be lost in a business failure or foreclosure.”
The Ermont receivership was the first case processed under regulations recently adopted by the Cannabis Control Commission, and a case of first impression for all parties involved. “Our experience assisting distressed businesses in other regulated and licensed industries provided a great foundation for this engagement,” Morrier said, citing the team’s experience in restructuring private and nonprofit businesses in healthcare, senior living, skilled nursing and affordable housing, among others. Casner attorneys have also represented businesses in the cannabis industry since Massachusetts legalized medical use in 2012, including the nonprofit formation, financing, licensure and eventual successful sale of one of the state’s largest cultivation operations.
About Opus Consulting Partners, LLC
Opus Consulting Partners is a business performance advisory firm that helps businesses and executive leadership teams transform, innovate, and accelerate their operations, creating solutions to empower businesses.
About Casner & Edwards, LLP
Casner & Edwards, LLP represents businesses, individuals and institutions across New England and around the world, providing the core legal services they need to succeed. Clients work directly with a team of expert attorneys, and can expect full attention, seasoned advice, top quality work, and good value.