TORONTO, April 1, 2020 /CNW/ - Namaste Technologies Inc. ("Namaste" or the "Company") (TSXV: N) (FRANKFURT: M5BQ) (OTCMKTS: NXTTF), a leading online platform for cannabis products, accessories, and responsible education, today provides an update with respect to the impact from the COVID-19 virus outbreak on its current operations.
On March 23, 2020 the Ontario government announced non-essential services must close their doors due to the COVID-19 pandemic, however certain sectors of the economy including liquor and cannabis retail and wholesale operations have been deemed essential services and are permitted to operate. Other provincial governments have followed Ontario's lead and many online and retail cannabis stores remain open across Canada. Namaste's wholly owned subsidiary, CannMart Inc. ("CannMart") plays an important role within the Canadian cannabis supply chain and is committed to remain open to serve its online patients and B2B customers including provincial government stores. Where possible employees are working from home and others are adhering to strict operating procedures to safeguard the health and safety of staff to ensure operations remain unaffected. To date, there have been no known cases of COVID-19 at any of Namaste offices or facilities and there have been no operational disruptions.
"In these extraordinary times, our thoughts go out to those working the frontlines and those who have been touched by the coronavirus," said Meni Morim, CEO of Namaste Technologies. "The health and safety of our people, patients and customers, business partners, investors and their communities are our top priority. We will continue to monitor the progress of COVID-19 developments and will act accordingly for the health and safety of all stakeholders."
Namaste also announces its continuing effort to strengthen its business model with the addition of Adastra Labs to the Namaste and CannMart family. CannMart Labs Inc. ("CannMart Labs") has entered into an agreement with Adastra Labs Holdings Ltd. (CSE: XTRX) (FRANKFURT: D2EP) ("Adastra") to supply cannabis extract and concentrate products. Adastra is a provider of same-site Health Canada licensed cannabis extraction and analytical testing services. The agreement provides for supply of cannabis extract and concentrates for Namaste's family of products available through CannMart.com and Namaste's network of government cannabis stores. Under the terms of the agreement, Adastra will supply standard processing services to CannMart Labs for cannabis extract and concentrate products over a period of 12 months expected to begin on May 1st, 2020.
According to a recent article in the Marijuana Business Daily industry sources say cannabis stores in Ontario and Alberta have reported unprecedented demand due in part to the COVID-19 outbreak. Namaste is committed to managing the recent surge in demand by keeping the supply lines open to its patients and customers while continuing to focus on employee and customer health. The Company has been successful at adding additional cannabis brands and products to CannMart's product line. Adastra Labs is a part of Namaste's increase in focus on profitable business relationships as it navigates the new realities facing the cannabis industry.
As previously announced in January, CannMart submitted notification for several new product SKUs including edible cannabis products, which are being manufactured by Choklat Inc, a company that Namaste holds a 49% equity interest in. These products are to be formulated, developed and packaged to meet the regulatory requirements as set out by Health Canada. While the Company expected to make these new products available in March, delays in packaging materials has caused the Company to defer its delivery schedule at this time.
COVID-19 Regulatory Relief
On March 18, 2020, the Canadian Securities Administrators issued a notice stating that securities regulators will be providing coordinated relief consisting of a 45-day extension for certain periodic filings required to be made on or prior to June 1, 2020. This blanket relief, as a result of the COVID19 pandemic, applies to reporting issuers and applies to financial statements, management's discussion and analysis, annual information forms, and certain other ancillary documents normally required to be filed in a timely manner under securities legislation.
As a result of the pandemic impact on internal and regulator resources, Namaste has elected to take advantage of the blanked relief granted pursuant to BC Instrument 51-515 and Ontario Instrument 51-502 in respect of the following:
- the requirement to file audited financial statements for the year ended November 31, 2019 (the "Financial Statements") within 120 days of the Company's financial year end as required by section 4.2(b) of National Instrument 51-102 (NI"51-102");
- the requirement to file management discussion and analysis (the "MD&A") for the period covered by the Financial Statements within 120 days of the Company's financial year end as required by section 5.1(2) of NI 51-102; and
- the requirement to file certifications of the Financial Statements (the "Certificates" and together with the Financial Statements, the "Annual Filings") pursuant to section 4.1 of National Instrument 52-109.
Namaste currently expects to file the Annual Filings by April 30, 2020.
Management and certain other insiders of Namaste are subject to an insider trading blackout which reflects the principles in Section 9 of National Policy 11-207 for until such time as Namaste has filed its Annual Filings.
Other than as previously disclosed by the Company, there have been no material business developments since the date of the Company's most recent filing of its interim financial reports and the associate management discussion and analysis.
Pineapple Express Update
World-Class Extractions Inc. (CSE: PUMP) (FRA:WCF) (OTCQB:WCEXF) ("WCE"), an innovation-driven company that deploys and manages purpose-built cannabis and hemp extraction and processing centres, has acquired a controlling interest in Pineapple Express Delivery Inc. ("Pineapple Express Delivery"), a privately held, Toronto-based delivery company in which Namaste holds both common shares and debt. As part of the transaction, Namaste will be able to convert its outstanding debt (approximately $1.6M) into the same value of WCE common shares in 11 months time. In addition, Namaste has granted WCE the option to acquire Namaste's common shares of Pineapple Express Delivery, which is exercisable during a 60 day period beginning two years following the closing of the transaction between WCE and Pineapple Express Delivery. All funds paid as a result of the transaction, will be received by, and remain in Pineapple Express Delivery to further fuel its growth and ongoing operations. This transaction allows Namaste's management to increase their focus on Namaste's core business, while adding a new conversion feature to Pineapple Express Delivery's debt thus providing a path to additional liquidity in the future.