Business
Canadian marijuana producer Phoena winds-down business, blames high taxes
Phoena Group says this cannabis facility in Pelham, Ontario, has an appraised real estate value of CA$28 million. (Photo by Matt Lamers)
Canadian cannabis producer Phoena Group has been granted creditor protection and is winding down its operations, the company said in court documents.
The Vaughan, Ontario-based company – formerly called CannTrust – said it no longer has the financial footing to continue operating.
As a result, Phoena plans to immediately halt the cultivation of new plants, destroy cannabis inventory not yet released for sale and lay off 87 employees, although upward of 238 of its workers will be affected.
CannTrust was one of the leading cannabis producers in Canada until it became embroiled in a cultivation scandal in 2019, with nearly 600 employees at the time and 19 million Canadian dollars ($14 million) in quarterly sales.
In the initial application under Canada’s Companies Creditors’ Arrangement law (CCAA), Phoena listed many challenges facing the company, including the oversupply of cannabis products in Canada, competition from other producers, over-regulation and excessive taxation.
Geoffrey Morawetz, chief justice of the Ontario Superior Court, issued the order under the CCAA last week at the request of Phoena.
“The applicants have debt in excess of CA$5 million, are insolvent, and are facing a liquidity crisis,” according to the CCAA filing.
Phoena owes roughly CA$1.88 million to the federal government, including:
- CA$911,893 to the Receiver General for Canada.
- CA$870,506 to the Canada Revenue Agency.
- CA$95,799 to Health Canada.
The company also said the industry faced “considerable initial over-exuberance,” resulting in the number of licensees rising from about 100 on the day of legalization in October 2018 to approximately 950 today – a roughly tenfold increase in competition.
Wind-down terms
Darren Karasiuk, a former Aurora Cannabis executive, is leading the wind-down as chief restructuring adviser.
As part of the wind-down, the company’s property in Fenwick, Ontario, is expected to be listed for sale, and inventory and equipment will be liquidated.
“I believe a liquidation and orderly wind-down of the Applicants is in the best interests of the Applicants’ creditors and other stakeholders,” Phoena’s interim CEO, Cornelis Pieter Melissen, said in an affidavit.
Melissen said overregulation has been an issue for the Canadian cannabis industry from the beginning, “and I am aware of a number of otherwise well-run cannabis businesses that have failed, or continue to struggle, due to factors such as excessive taxes, complex regulatory requirements, government delays in licensing, and limitations on dosage size, packaging and marketing.”
“In addition, certain government purchasers/retailers have experienced internal purchasing, distribution and delivery issues, among other problems,” Melissen wrote in the affidavit.
The company’s court filing cited MJBizDaily data showing that Canada’s federally licensed producers destroyed a record 425 million grams (468 tons) of unsold, unpackaged dried cannabis in 2021.
For the fiscal year ended Dec. 31, 2022, Phoena recorded a net loss of CA$24.8 million on sales of CA$13.2 million.
The federal government imposed CA$1.82 million in excise taxes that year, representing almost 14% of the company’s gross revenue.
In the first month of 2023, Phoena said, it lost CA$317,000 on gross sales of CA$1.2 million.
Phoena haunted by CannTrust past
Melissen said Phoena faced several additional challenges stemming from the time it was known as CannTrust.
In September 2019, Health Canada partially suspended CannTrust’s cannabis licenses at its facilities in Vaughan and Fenwick for noncompliance with federal cannabis legislation.
Earlier that summer, Canada’s federal regulator was notified of “unlicensed” growing taking place in several of CannTrust’s cultivation rooms.
Three of the company’s former executives were acquitted of all charges in late-2022 after the case collapsed.
The charges came from a nearly two-year joint investigation by the Ontario Securities Commission (OSC) and Royal Canadian Mounted Police (RCMP) after a whistleblower alerted Canada’s cannabis regulator in 2019 about five “unlicensed” cultivation rooms the company had been operating since 2018.
CannTrust’s licenses were reissued by the federal government on Sept. 14, 2020, and Dec. 15, 2020, respectively.
In 2022, CannTrust Holdings exited court-supervised CCAA proceedings after completing a financing led by Marshall Fields International B.V., which is a subsidiary of Kenzoll B.V., a Netherlands-based private equity investment company.
Marshall was one of the investors that acquired 90% of the equity of CannTrust Equity, which owned CannTrust.
Before its regulatory issues, CannTrust was listed for trading on the Toronto Stock Exchange and the New York Stock Exchange.
Source: https://mjbizdaily.com/canadian-marijuana-producer-phoena-winds-down-business-blames-high-taxes/
Business
Jio’s 1,600-Satellite LEO Constellation Gets Technical Green Light
Reliance Jio has crossed a significant milestone in its space connectivity ambitions after its proposal to deploy a Low Earth Orbit (LEO) satellite constellation of around 1,600 satellites received a positive technical assessment from the Indian National Space Promotion and Authorisation Centre (IN-SPACe).
The evaluation, conducted jointly by IN-SPACe, the Indian Space Research Organisation (ISRO), and the Wireless Planning and Coordination (WPC) wing of the Department of Telecommunications, reportedly concluded that Jio’s proposed system meets the required technical standards and is comparable to leading global satellite broadband networks.
India’s Indigenous LEO Satellite Vision
Under the proposal, Reliance Jio plans to deploy between 1,600 and 1,650 satellites in Low Earth Orbit at an altitude of around 650 kilometres.
The planned constellation is expected to provide high-speed satellite connectivity across India, with approximately 32 satellites visible from any location at a given time. The company aims to roll out the network within the next two to three years, subject to regulatory approvals.
According to industry estimates, the satellite system could deliver 4.5 to 5 terabits per second (Tbps) of total data capacity, making it one of the largest satellite broadband projects proposed in India.
The project is expected to require an investment of $10–15 billion (approximately ₹95,000 crore to ₹1.42 lakh crore), reflecting the scale of infrastructure needed for satellite manufacturing, launches, ground stations, and user terminals.
Regulatory Process Moves Forward
Following the successful technical review, the proposal is expected to move into the next phase of regulatory approvals.
The government may now assist Jio in securing orbital slots, coordinating spectrum usage, and filing applications with the International Telecommunication Union (ITU), the global body responsible for managing satellite orbit and frequency allocations.
Obtaining orbital rights remains a critical step, as Low Earth Orbit has become increasingly competitive due to the growing number of satellite broadband projects being planned worldwide.
Officials also indicated that the proposed satellite architecture has been designed to coexist with future Indian LEO constellations, allowing multiple domestic operators to share orbital resources efficiently.
Broadband, Mobile Connectivity, and Strategic Applications
Jio plans to use the satellite network to provide a range of communication services, including satellite broadband, mobile backhaul, enterprise connectivity, and direct-to-device (D2D) satellite communication, particularly in remote and underserved regions where conventional telecom infrastructure is limited.
The company also intends to establish 20 to 22 ground stations across India to support network operations.
Apart from commercial telecommunications, officials have highlighted the project’s potential strategic importance. A domestically developed satellite constellation could strengthen India’s communication infrastructure, reduce dependence on foreign satellite operators, and support national security requirements.
Reports suggest preliminary discussions are underway regarding the possibility of integrating defence-related payloads into some satellites, enabling both civilian and strategic use.
Major Step for India’s Space and Telecom Sectors
Industry analysts view the technical clearance as an important milestone in India’s expanding private space ecosystem. If Jio secures the remaining regulatory approvals and international orbital clearances, the project could become the country’s first large-scale indigenous LEO satellite broadband network.
The initiative also aligns with India’s broader efforts to expand digital connectivity while strengthening its presence in the global satellite communications market.
Business
Alleged Crores Pharma Scam Mastermind Arrested from Surat
After evading law enforcement for nearly 13 years, an accused linked to a large-scale pharmaceutical fraud case has been arrested by Delhi Police from Surat, Gujarat. The suspect is alleged to have orchestrated a series of financial scams involving fake identities, forged documents, and dishonoured cheques used to procure high-value pharmaceutical raw materials.
Authorities say the accused, identified as Himmat Singh Lodha, is believed to have defrauded multiple pharmaceutical companies in Delhi of goods worth approximately ₹98 lakh before disappearing and remaining underground for years.
Fake Business Deals and Dishonoured Cheques Used in Fraud
Investigators claim the accused posed as a legitimate pharmaceutical trader and placed bulk orders for expensive drug ingredients, offering post-dated cheques as payment security.
In one documented case from 2013, he allegedly obtained around 550 kilograms of Gliclazide, a diabetes-related pharmaceutical ingredient, valued at over ₹26 lakh. When suppliers attempted to encash the cheques, they were reportedly returned with the remark “account closed.”
Following the transaction, the accused allegedly vacated his office and rented residence and disappeared without settling payments. He was later declared a proclaimed offender in 2016 after repeatedly failing to appear before court proceedings. Authorities had also issued a reward for information leading to his arrest.
Multiple Identities and Repeated Fraud Pattern
Police investigations further link the accused to another cheating case dating back to 2012, where he allegedly used a fake identity, “Kailash Jain,” to obtain a large consignment of Ambroxol HCL, a pharmaceutical compound used in cough medications. The value of that consignment was estimated at around ₹72 lakh.
Officials believe the accused followed a consistent modus operandi—posing as a credible businessman, securing high-value goods on deferred payment terms, and then disappearing after delivery while shutting down business operations.
Investigators suspect that forged business records, fake company credentials, and fabricated financial histories were used to build trust with suppliers and gain access to expensive raw materials.
Multi-State Surveillance Leads to Arrest in Surat
A special Crime Branch team tracked the accused through coordinated surveillance efforts across multiple cities, including Mumbai, Ahmedabad, and Surat. After nearly a month of technical monitoring and intelligence gathering, officials located and arrested him from a residential area in Surat.
Authorities also revealed that the accused had been involved in property-related activities while staying under the radar to avoid detection.
Growing Threat of Corporate Identity Fraud
The case highlights a rising trend of organised financial fraud targeting industries that rely heavily on trust-based transactions and deferred payments. Experts note that criminals increasingly exploit gaps in corporate verification systems by using fake GST registrations, temporary offices, and forged documentation to appear legitimate.
Cybercrime and financial fraud specialists warn that such schemes are becoming more complex with the widespread availability of digital business tools, making it easier to create convincing but fraudulent corporate identities.
Experts Urge Stronger Due Diligence in High-Value Transactions
Experts, including former IPS officer and cybercrime specialist Prof. Triveni Singh, emphasize the need for stricter verification procedures in commercial dealings. He noted that relying solely on paperwork or digital business profiles can expose companies to significant financial risk.
Authorities and industry experts recommend physical verification of business operations, bank account validation, and detailed background checks before engaging in high-value or deferred-payment transactions—particularly in sectors like pharmaceuticals, where single consignments can involve transactions worth crores.
Business
EU Pressure Builds on Google as Regulators Face Calls for Massive Fine Over Search Practices
A growing coalition of European industry groups is intensifying pressure on regulators to take decisive action against Google over allegations of unfair search practices that could reshape competition rules across the region’s digital economy.
Investigation Under Digital Markets Act Gains Momentum
The case is being examined by the European Commission under the European Union’s landmark Digital Markets Act (DMA), introduced to curb the dominance of major technology platforms and ensure fair competition.
Launched in March 2024, the investigation focuses on whether Google has been prioritising its own services in search results, potentially disadvantaging rival businesses that rely on online visibility to reach customers.
Industry Groups Demand Swift Action
Several prominent European organizations have jointly urged regulators to conclude the probe without further delay. They argue that prolonged investigations allow alleged anti-competitive practices to continue, putting European companies—especially startups—at a disadvantage.
Signatories include the European Publishers Council, the European Magazine Media Association, the European Tech Alliance, and EU Travel Tech.
In a joint statement, these groups warned that delays in enforcement are affecting innovation, profitability, and growth prospects for regional businesses competing in digital markets.
Google Denies Allegations
Google has rejected claims of bias, stating that its search algorithms are designed to deliver the most relevant and useful results to users. The company has also proposed adjustments to address regulatory concerns.
However, critics argue that these changes are insufficient and fail to address the core issue of market dominance.
Potential Billion-Euro Penalties
If found in violation of the DMA, Google could face significant financial penalties. Under EU rules, fines can reach a substantial percentage of a company’s global turnover, potentially amounting to billions of euros.
Regulators may also impose corrective measures requiring changes to business practices, which could have long-term implications for how digital platforms operate in Europe.
Wider Implications for Big Tech
The case highlights ongoing tensions between European regulators and major U.S. technology firms. In recent years, the EU has taken a more aggressive stance in enforcing competition laws, aiming to create a level playing field for local businesses.
A final ruling against Google could set a major precedent, influencing future enforcement actions and shaping the regulatory landscape for global tech companies operating within Europe.
As scrutiny intensifies, the outcome of the investigation is expected to play a critical role in defining the future of digital competition across the European Union.
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