Dozens of former employees of an Ontario-based cannabis company are accusing their employer of violating provincial labour laws by not awarding them severance pay, after a mass layoff last month that saw 53 employees terminated before the company filed for bankruptcy protection.
More than 40 former full-time workers at Entourage Health Corp., a cannabis producer and distributor in Aylmer, Ont., about 200 kilometres southwest of Toronto, filed complaints with the province’s Ministry of Labour in June, stating they were laid off with no notice and not offered severance pay.
The termination letter sent by Entourage to its employees on June 8 – a copy of which was viewed by The Globe and Mail – indicates that employees were terminated immediately, and offered a lump sum payment equivalent to two weeks of pay, in lieu of receiving two weeks notice. The letter also states that because of the company’s financial circumstances, it would be “limited in its ability to make material cash outlays, including termination or severance pay.”
Entourage Health is primarily owned by the pension fund of the Labourers International Union of North America, or LiUNA, a private sector union that represents tens of thousands of workers in the health care, construction and waste management sectors.
Neither Entourage nor the LiUNA Pension Fund responded to multiple requests by The Globe for comment about the severance pay.
Most of the employees had worked at Entourage for at least five years.
Ontario’s Employment Standards Act states that employees who have worked for at least five years at a company with an annual payroll of $2.5-million or more are entitled to severance pay of a week of regular wages per year of service, up to a maximum of 26 weeks.
If a company lays more than 50 workers off from one location within a four-week period, it is considered to be a mass termination and the company has to provide eight weeks’ notice or pay in lieu.
During Canada’s cannabis boom, LiUNA and its pension fund invested in a medical cannabis company called Starseed Holdings in 2017, which in 2019 became a subsidiary of Entourage. Starseed’s business model was to offer exclusive partnerships with local LiUNA unions to give their members access to medical cannabis and coverage under their benefit plans.
Between 2019 and 2025, the union’s pension fund began increasing its stake in Entourage through a series of equity and debt investments, ultimately becoming Entourage’s biggest lender and largest shareholder.
In April, 2025, the company was taken private by a numbered company affiliated with LiUNa and delisted from the Toronto Venture Exchange, after years of increasing debt and a failure to be profitable despite growing revenue. Entourage filed for court protection under the Companies Creditors Arrangement Act (CCAA) at the end of June this year, weeks after winding down its recreational cannabis business and laying off most of its employees.
The medical cannabis side of Entourage’s business is still in operation, with 22 full-time employees.
Court filings as part of the CCAA process indicate that Entourage owes LiUNA’s pension fund roughly $240-million. The pension fund attempted to sell Entourage this year, but received little interest from other industry players, prompting the cannabis company to file for bankruptcy protection according to court documents.
“We are concerned that after the company goes through restructuring, we won’t be able to recover the severance money they owe us,” Benjamin Hessel, a former employee of Entourage who was laid off on June 8, said in an interview with the Globe.
Gabriela Ayee, former manager of product innovation at Entourage, told The Globe that up until the day before the mass layoffs were announced, she was placing orders for cannabis packaging and working with her team to develop new product lines. “I thought even if we were laid off, it would not happen suddenly.”
Ms. Ayee noted that since the start of 2026, employees sensed that the company was in financial trouble.
Both Ms. Ayee and Mr. Hessel filed complaints with the Ontario Ministry of Labour immediately after receiving their termination letters and are currently engaging a lawyer to help them with a potential claim against the company.
An e-mail exchange, viewed by The Globe, between Mr. Hessel and a representative from the pension fund about the severance did not provide clear answers, merely stating that the company was obligated to follow the CCAA process.
Recovering lost wages during a bankruptcy restructuring proceeding is usually not a straightforward process, noted Neena Gupta, a labour and employment lawyer with Gowling WLG, who added that it did not matter if the company laid off workers before or after filing for bankruptcy.
“If the company has no money, the workers ultimately become unsecured creditors in the bankruptcy process,” she said.
Government creditors and senior secured lenders like large banks are usually prioritized for repayment by companies that have declared bankruptcy, often leaving workers with little sway over owed wages.
There are some options, however, the Wage Earner Protection Program is a federal government initiative that compensates workers when their employer has gone bankrupt, or when they are in creditor protection. Currently, the maximum one-time payment workers can receive is $9,275.