Emblem Cannabis Buys Ayurcann Brands and Factory Out of Insolvency

Red White & Bloom Brands (CSE: RWB) is set to close one of Canada’s tidier distressed deals on or about June 5, 2026. Its subsidiary Emblem Cannabis will take possession of Ayurcann‘s operating business through a court-authorized share purchase — picking up three consumer brands, a Health Canada-licensed manufacturing facility in Pickering, Ontario, and distribution into eight Canadian provinces and territories, for an undisclosed cash price.

The transaction ends a court-supervised creditor protection process that began on January 30, 2026, when Ayurcann Holdings Corp. and its operating subsidiary filed for protection before the Ontario Superior Court of Justice. The trigger was the Canada Revenue Agency: court filings record approximately CA$10.6 million in outstanding taxes, interest, and penalties as of January 26, 2026. Ayurcann had built itself from a business-to-business cannabis services operation into a vertically integrated producer with its own brands and a licensed manufacturing facility — but it could not absorb the cost of federally licensed production against the sustained wholesale price compression that has pressured mid-size Canadian operators over the past two years.

Alvarez & Marsal Canada was appointed court monitor. The Ontario Superior Court approved a formal sale and investment solicitation process on February 13, 2026. Emblem submitted a binding bid and was selected as the successful bidder on April 13, 2026, with the original closing set for no later than May 15, 2026.

Inside the Transaction

The deal is structured as a share purchase, with Emblem acquiring 100% of newly issued shares in the Ayurcann operating entity — giving it indirect ownership of the business and its regulatory licences while keeping excluded assets and liabilities off the balance sheet, vested into a separate Ayurcann affiliate.

Financing the path to close moved in two steps. Auxly Cannabis (XLY.TO ) Group had been the debtor-in-possession lender since February 2026. On June 2, 2026, Emblem assumed that lender position through an assignment agreement with Auxly, paying CA$1.6 million to take over the outstanding loan and all related security interests. Auxly’s DIP position was assigned absolutely and irrevocably on that date. Emblem simultaneously committed a new CA$3 million facility at 12% per annum to fund Ayurcann’s working capital and restructuring costs through the close.

On the asset side, Emblem acquires the Fuego, Xplor, and Happy & Stoned brand portfolio along with associated trademarks and intellectual property — more than 90 product lines distributed across approximately 2,500 retail outlets in eight provinces and territories, per the company’s April 2026 announcement. Vapes and pre-rolls are the core of the portfolio, two of the fastest-turning categories in the Canadian adult-use market. The Pickering manufacturing facility, production equipment, and Ayurcann’s existing commercial and distribution relationships transfer as well.

Deepening RWB’s Canadian Platform

For RWB, the acquisition builds on a Canadian position the company only established two years ago. RWB entered Canada through its acquisition of Aleafia Health — a transaction also executed out of a court-supervised insolvency process — which brought Emblem Cannabis into the group alongside a licensed facility in Paris, Ontario and distribution into five Canadian provinces, plus medical and international channels.

Emblem already held a cannabis processing licence before the Ayurcann deal. What the Pickering facility adds is a dedicated vape and pre-roll manufacturing base and Ayurcann’s established retail relationships in three additional provinces — extending RWB’s national distribution footprint from five to eight provinces and territories.

That expansion has real commercial value because shelf presence in Canadian adult-use is built incrementally through distributor and provincial board relationships, not switched on overnight. Ayurcann’s retail network took years to assemble. Buying it out of insolvency at a distressed price — without inheriting the CRA liability or the company’s other excluded obligations — is a qualitatively different proposition than organic growth would be.

The May 15, 2026 deadline slipped as the court process ran longer than anticipated. The new expected close date is on or about June 5, 2026, with the hard backstop at June 30, 2026. Once the shares transfer and the licences follow, RWB will operate two licensed Ontario facilities and a national brand portfolio spanning vapes, pre-rolls, and adjacent adult-use categories — a materially larger Canadian manufacturing and distribution platform than it held eighteen months ago.