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FiSai US Management, a holder of $50 million in The Cannabist Co.’s (OTC: CBSTF) secured notes due Feb. 2, 2026, formally notified the company’s board and CEO of its concern regarding liquidity management, underperformance and strategic missteps.
In addition, FiSai told Green Market Report that it is frustrated with the lack of a comprehensive strategic plan to address these issues.
Now, FiSai is making its concerns publicly known by releasing a letter originally sent to The Cannabist on Sept. 26 that outlines all the bad decisions it says the company has made, including what it called “strategic failures” by CEO David Hart and Chairman of the Board Michael Abbott.
The letter also emphasizes FiSai’s view that the executives of The Cannabist are employing a “pray and hope” strategy that macroeconomic events, such as a favorable presidential election or the passage of Florida’s Amendment 3, will provide positive cover for the company.
Mountain of debt
The Cannabist has $60 million in current debt due May 2025, a material coupon payment due February 2025 and $185 million in senior secured debt maturing in February 2026. According to the letter, FiSai’s concerns stem from the fact that it is a significant lender to The Cannabist, holding $50 million of the 2026 secured notes.
FiSai said it provided Hart with refinancing alternatives on Sept. 3, but the company has not provided any substantive response or engaged in meaningful discussion with its stakeholders.
“The Company appears to be habitually handicapped and blindsided by typical market fluctuations and maturities of its known liabilities,” FiSai wrote.
Another challenge, according to the lender, is that the largest public MSOs in the cannabis industry have a combined $3 billion in debt maturing in 2026. That means numerous companies likely will be trying to restructure debt at the same time, creating a formidable competitive financial landscape, which will affect the availability and cost of capital.
Complaint desk
The letter is a candid rundown of the mistakes FiSai believes The Cannabist has made, including:
The sale of assets to Verano, which FiSai called a short-sighted move that was forced by poor cash management. FiSai told Green Market Report that it was a terrible idea to sell core assets that it considered the “crown jewels” as a last-minute solution to satisfy foreseen and known cash obligations, a scenario that would have been avoided with prudent management.
The failed Cresco merger, which exposed stakeholders to undue risks for underestimating the divestiture of assets – a key reason the deal floundered.
Poor company performance metrics as compared to other MSOs.
Lack of response to stakeholders with realistic and executable solutions.
Poor planning and rushed asset sales that hurt the company’s stability.
The lender is also upset by what it calls “just-in-time” financing. It accuses The Cannabist of haphazardly selling assets in markets that were once described as “core growth” markets, without identifying any clear strategy or plan.
The lender
FiSai was co-founded by two cannabis industry veterans, Erich Griffin-Mauff and Jared Cohen.
Prior to FiSai, Griffin-Mauff co-founded and served as president and a board member of Jushi Holdings. Erich stepped down from all duties at the company in June 2021. For the full year 2023, Jushi generated $270 million in revenue and employed 1,188 people.
Cohen previously led corporate development and strategy for Revolution Global, a private multistate cannabis operator and was a senior executive at Glass House Brands. Before his involvement in cannabis, Cohen was a partner and managing director at Fortress Investment Group, vice president of principal investments at Merrill Lynch, and an investment banking analyst at Morgan Stanley.
“}]] [[{“value”:”FiSai holds $50 million of The Cannabist’s debt and is getting nervous about the company’s poor performance.
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