Press Release

Burns & Levinson Represents Teneo Funds in Successful Resolution of First Ever Receivership of a Cannabis Company in Massachusetts

March 13, 2023


Boston, MA, March 9, 2023 – Burns & Levinson successfully steered the resolution of the first ever receivership of a cannabis company in Massachusetts through its representation of Teneo Funds SPVi LLC, the debt holder for Quincy, MA-based medical cannabis operator Ermont, Inc. Multi-state cannabis operator MariMed Inc. (CSE: MRMD) (OTCQX: MRMD) completed the acquisition of the operating assets of Ermont on March 9, 2023. The acquisition required approvals by the MA Superior Court, the Massachusetts Cannabis Control Commission, and the city of Quincy, which permitted the assignment of two Host Community Agreements in Quincy to MariMed.

In 2021, Burns & Levinson and Teneo Funds petitioned the Massachusetts Superior Court to appoint a Receiver to take control of Ermont’s assets on account of a default of a $22 million plus obligation under a secured loan agreement. As part of its strategy to seek the first-ever cannabis company receivership in Massachusetts, Burns & Levinson worked collaboratively with the Massachusetts Cannabis Control Commission – providing input on the development of the new regulations on receiverships and secured party rights, and working to obtain pre-approval of a receiver – before presenting it to the court for approval. The court approved the appointment of a receiver by order dated November 22, 2021, after which time, the receiver commenced a process to sell all of Ermont’s assets to a third party. On October 13, 2022, the Superior Court approved the sale of substantially all of Ermont’s assets to MariMed.

The Burns & Levinson team was led by partner Frank A. Segall, who chairs the firm’s Cannabis Business & Law Advisory Group and Business Law Group, and partner Scott Moskol, who co-chairs the Cannabis Business & Law Advisory Group and Financial Restructuring & Distressed Transactions Group. Both are nationally-known cannabis law experts, each with over 30 years of experience in restructurings, workouts, bankruptcies, receiverships, and other insolvency-related matters.

“The work we did with Teneo Funds was not only a major win for our client, but for the entire cannabis industry, which needs the ability to solve growing insolvency problems without the benefit of bankruptcy protections. Unfortunately, we are going to continue to see more and more of these distressed situations in the cannabis market as operators confront the current realities of market saturation, lack of capital, over leveraging, growing expenditures, and onerous taxation. Whether it’s for an operator facing economic difficulties, a secured lender like Teneo who is looking to protect its investment or an opportunistic investor looking for special situation in the cannabis industry, we can help our clients find novel solutions,” said Segall. 

“We are at the forefront of cannabis restructuring, and are highly skilled at navigating never-before-seen situations where experience and knowledge is key to moving forward. While receivership of a cannabis company is still a new idea, we have already seen others using our strategy as a model, and we look forward to helping others navigate this emerging area of the law,” added Moskol. Burns & Levinson was the first major Boston corporate law firm to develop a national cannabis business practice, and has been advising cannabis businesses, entrepreneurs and investors across the country for nearly a decade. The firm has unrivaled experience in cannabis and hemp/CBD business formation and corporate structuring, private placements, venture capital, M&A, securities, banking issues, fund formation, debt and equity financing, restructuring and receiverships, real estate acquisitions and leasing, intellectual property protection, 280E taxation issues, and cannabis litigation. The firm is well-known for its role in the cannabis banking industry and is among the top law firms in the country handling M&A and high-level corporate and financing deals in the private and public markets in the cannabis market.

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