Owner of Kelowna distillery says the company will ‘live on’ despite foreclosure on property
The owner of a Kelowna distillery says the company will continue to operate despite a court-ordered sale of the property.
Forbidden Spirits has been selling its liquor and providing tastings out of its Wallace Hill Road location in Southeast Kelowna since 2019, four and a half years after founder Blair Wilson first started the company.
Wilson, a former Member of Parliament, moved his family to the property in the summer of 2010 from the Lower Mainland, and soon began turning the apples grown on his orchard into vodka and other liquors.
But earlier this month, the 20-acre property was foreclosed on and listed as a court-ordered sale for $4.89 million. The property includes an 8,500 square-foot house, a 3.5-acre apple orchard, the 10-stall Apple Orchard RV park, equestrian facilities, and the Forbidden Spirits tasting room and production facility.
Owing more than $1 million
According to court documents, Blair Wilson and his wife Kelly Wilson took out a private equitable mortgage on their property with Instafund Mortgage Management Company in the amount of $1 million in June 2023.
But according to the filings, the Wilsons have not made the payments on the mortgage and have now defaulted, owing more than $1.08 million as of May 1, 2024. As such, the courts ordered the property be sold.
Wilson said they went through “some struggles” during the COVID-19 pandemic and they’ve seen sales out of their tasting room decrease since the changes in Kelowna’s Airbnb rules.
But while they’ve been forced to sell their property, Wilson says “things have gotten a lot better since COVID and Forbidden Spirits “will live on and will continue to grow in the future.”
“Luckily we’ve got multi sources of income streams, from online sales which has increased significantly for us, to people seeing our products at farmers’ markets and special events, and as well in the private liquor stores here in B.C.,” he said.
Nicole Eastman, a real estate agent who’s selling the Wilsons’ property, said the court has ordered a “vacant possession” for the sale, which would suggest the distillery be required to find a new home once a sale goes through. But Wilson is optimistic the business will be able to stay put.
“I’m hopeful that we’ll be able to continue to run Forbidden Spirits out of the same location that we’ve been doing for last number of years, but if that’s not in the cards, then I’m amicable to be looking around for other locations that may suit us … we’ll cross that bridge when we come to it,” he said.
“A lot of the people I’ve talked to who’ve come to take a look at it are interested in having us continue to operate Forbidden Spirits in that location. We’ve been there for a while and people know where we are which is great. Southeast Kelowna has been a great place for us to live for the past 12 years, we’ve enjoyed it immensely.”
‘Cease trade order’
Forbidden Spirits is a publicly traded company, a somewhat unique situation for a small distillery, but they’ve been barred from trading stocks on the Toronto Stock Exchange. The BC Securities Commission issued a “cease trade order” for Forbidden Spirits stocks back on May 8, 2023, for failing to file financial disclosure documents.
“We had a bit of a cash flow issue at that point in time and the cost of having an audit was significantly higher than we had initially anticipated,” Wilson said.
This past July, the BC Securities Commission partially revoked the cease trade order and last week and the company announced it had completed the “first tranche” of a private placement, from 13 private investors.
“We just raised $305,000 to be able to be able to pay the auditors and the accountants and the lawyers to facilitate the completion of the documentation such that the Toronto Stock Exchange can get us back up and trading on the venture exchange,” he said.
Wilson added they’ll be completing the required audit and paperwork over the next couple months, and anticipates Forbidden Spirits, under the ticker symbol VDKA, will be back up and trading on the TSX by late January or mid-February.
“The company intends to use the net proceeds from the private placement to prepare and file outstanding financial statements and continuous disclosure records, pay outstanding related fees and penalties, meet certain financial obligations, and continue operations until it can apply for and receive a full revocation of the [Failure to File Cease Trade Order],” the company’s press release states.
This isn’t the first time the company has raised funds through a private placement. Back in 2021, it raised $3.6 million through a private placement with Spartan Acquisition Corp., which led to them being listed on the Toronto Stock Exchange.
Sued over unpaid loans
Lawsuits filed in Small Claims Court in November 2023 by Cassis Developments Inc. said the company loaned Forbidden Spirits and the Wilsons two separate loans of $59,500, one on Nov. 5, 2021, and one on May 30, 2022.
“The defendant has made various excuses over the last 15 months, claiming that he had a new loan coming, that he’s selling his house etc. but he never came through,” the lawsuits state.
“Meanwhile, the defendants paid $20,000 to take their grown daughter, their son-in-law and their 2 grandkids on a Mexico vacation with them in December 2022. This was after the loan was due and he claimed he didn’t have the money.”
The suit goes on to say that Blair Wilson partially repaid the loans, but after agreeing to instalment payments in August 2023, his post-dated cheques were returned as “non-sufficient funds.”
Judges have recently ordered Wilson pay back the remaining balance on the loans, at a rate of no less than $2,000 per month on one and $3,500 per month on the other.
Cassis also sued the Wilsons and Forbidden Spirits over the $6,900 purchase of a 200-litre barrel of whiskey in 2021. The lawsuit said the Wilsons had “repeatedly failed to provide evidence that the barrel exists in storage,” despite it coming to maturity in January 2024. A judge ordered Forbidden Spirits pay Cassis $8,500 by Oct. 15 of this year.
Wilson tells Castanet the issue dates back to his company’s “cash-flow issues” from a couple years ago, but the matters have now been resolved
“Two out of the three have actually been paid off and we’ve moved on,” Wilson said.
Former Member of Parliament
Blair Wilson served as the MP for West Vancouver—Sunshine Coast—Sea to Sky Country from 2006 to 2008. He was the subject of a series of stories in The Province newspaper in 2007 alleging his 2006 victory was aided by unlawful spending. Wilson resigned from the Liberal caucus amid the allegations.
While Elections Canada later cleared Wilson of 21 of the 24 allegations of improper campaign financing, he was not permitted to rejoin the Liberal Party and he ran unsuccessfully for the Green Party of Canada in 2008.
Wilson sued The Province over the articles, and while he was initially awarded $125,000 for defamation over a single claim in one of the articles, the BC Court of Appeal later overturned the decision.