Cannabist Company Extends Debt Forbearance Through February 2025

The Cannabist Company has secured another extension on its forbearance agreement with senior noteholders, pushing the deadline to February 14, 2025. The Massachusetts-based multi-state operator announced the move Tuesday as it continues working through financial restructuring with creditors.

The extension marks the latest chapter in Cannabist's ongoing debt negotiations. The company, which operates dispensaries across multiple states including Arizona, Maryland, and Virginia, has been working with noteholders since earlier this year to address its capital structure.

Under the extended agreement, noteholders have agreed not to exercise default remedies while the company pursues a comprehensive restructuring plan. The forbearance covers Cannabist's senior secured notes, which have become a focal point as the operator navigates a challenging period for cannabis retailers.

The Financial Picture

Cannabist joins a growing list of multi-state operators restructuring their debt loads. The cannabis industry has seen several major players renegotiate terms with lenders over the past 18 months as market conditions tightened and capital became scarce.

The company has been trimming operations while maintaining its core retail footprint. Recent quarters have seen Cannabist focus on profitability in key markets rather than expansion—a shift many MSOs have made as the industry matures beyond its initial growth phase.

For consumers, these financial maneuverings typically happen behind the scenes. Cannabist's retail locations have continued normal operations throughout the restructuring process, with no announced store closures tied to the debt negotiations.

What This Means for Operators

The forbearance extension suggests both sides see a path forward. Noteholders wouldn't grant additional time without believing a workable restructuring plan exists. For Cannabist, the breathing room allows management to focus on operations rather than immediate default concerns.

Other MSOs are watching closely. How Cannabist emerges from this process could set precedents for debt restructuring across the industry. The cannabis sector's limited access to traditional bankruptcy protections—due to federal prohibition—means companies must negotiate creative solutions with creditors.

Several factors are pushing cannabis companies toward restructuring. State markets have matured faster than expected, creating price compression. Federal rescheduling remains uncertain despite recent DEA movement. And 280E tax burdens continue squeezing margins for operators who can't deduct normal business expenses.

What's Next

The February deadline gives Cannabist roughly three months to finalize restructuring terms. Industry observers expect the company to announce a comprehensive plan before then—likely involving some combination of debt-to-equity conversions, extended payment terms, or asset sales.

For now, the extension removes immediate pressure while negotiations continue. Cannabist's ability to secure multiple extensions indicates creditors believe in the underlying business fundamentals, even as the capital structure needs adjustment.

The company operates some of the industry's longest-running dispensaries, with deep roots in medical markets that predate adult-use legalization in several states. That operational history gives creditors confidence the business can stabilize once debt obligations are rightsized.

This article is based on original reporting by financialpost.com.