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FiSai US Management, a $50 million holder in The Cannabist Co. (OTC: CBSTF), secured notes due February 2, 2026. Notification in writing Inform the CEO and board of directors about your concerns regarding underperformance, strategic mistakes and poor liquidity management.

FiSai also told Green Market Report It is frustrated by the lack of a comprehensive strategy to address these issues.

FiSai has now made its concerns public by releasing an original letter sent to The Cannabist in September that outlines the bad decisions the company, including what they called “strategic failings” by CEO David Hart, and Chairman of The Board Michael Abbott.

The letter also highlights FiSai’s view that The Cannabist executives are using a “pray-and-hope” strategy, hoping that macroeconomic events such as a favorable Presidential election or Florida’s Amendment 3 will provide positive coverage for the company.

Mountain of debt

The Cannabist owes $60 million in current debt, due in May 2025. It also has a material coupon due in February 2025. And $185 million of senior secured debt that matures in February 2026. FiSai is concerned because it is a major lender to The Cannabist and holds $50 million of 2026 secured notes.

FiSai stated that it provided Hart with refinancing options on Sept. 3 but the company hasn’t provided any substantive responses or engaged in meaningful discussions with its stakeholders.

FiSai wrote: “The Company seems to be blindsided and handicapped by typical market fluctuations, and maturities of known liabilities.”

According to the lender, another challenge is that the largest cannabis MSOs have a combined debt of $3 billion due in 2026. This means that many companies will be restructuring debt at the same, creating a competitive financial landscape which will affect capital availability and costs.

Complaint desk

The letter is an honest rundown of all the mistakes FiSai thinks The Cannabist made, including

• FiSai said that the sale of assets to Verano was a shortsighted move forced by poor cash-management. FiSai said Green Market Report It was a bad idea to sell assets it considered to be the “crown Jewels” in order to meet foreseen cash obligations. This scenario could have been avoided if prudent management had been used.
• The failed Cresco deal, which exposed stakeholders undue risk for underestimating divestiture of assets. This was a major reason why the deal floundered.
• Poor company performance metrics compared to MSOs.
• Lack of realistic and executable solutions to stakeholders.
• Poor planning and rushed asset sale that harm the company’s stability.

The lender is also unhappy with what it calls “just in time” financing. It accuses The Cannabist, of selling assets haphazardly in markets that were described as “core-growth” markets without identifying a clear strategy or plan.

The lender

FiSai is co-founded by Erich Griffin Mauff and Jas Cohen, two cannabis industry veterans.

Griffin-Mauff was a co-founder and board member of Jushi Holdings before joining FiSai. She also served as its president. Erich stepped down as CEO of the company in June 2021. Jushi had 1,188 employees and generated $270 million revenue in 2023.

Cohen was a senior executive with Glass House Brands and led corporate strategy and development for Revolution Global, an independent multistate cannabis operator. Cohen worked as a managing director and partner at Fortress Investment Group. He was also vice president of principal investment at Merrill Lynch and an analyst in investment banking at Morgan Stanley.