The cannabis-focused company also said it has put its Namaste Café rollout on hold
() (OTCMKTS:NXTTF) said Wednesday that it has launched a strategic review and suspended certain initiatives like the introduction of Namaste Café, a cookbook and a H.E.A.L. product line.
“Following recent changes in management, Namaste's executive team has undertaken an in-depth strategic review of its current and future operations globally,” the cannabis-focused company said in a statement.
The review is laser-focused on streamlining the business and ensuring compliance throughout the organization.
DEEP DIVE: Namaste Technologies looks to become the ‘Amazon of cannabis’ with its integrated, intelligent cannabis experience
The company said it has expanded the mandate of its special independent legal counsel Norton Rose Fulbright Canada LLP to assist with the company's compliance throughout its global business and operations, conducted primarily through its Bahamian subsidiary.
“During this review period, the company has elected to suspend certain initiatives that no longer align with the company's mission and strategic direction, such as the introduction of Namaste Café, a cookbook and H.E.A.L. product line in relation to its previously announced franchise distribution model,” said the company in a statement.
Namaste had earlier announced its plans to launch a new retail brand called the Namaste Café, with its first location slotted for Toronto in early 2019.
In February, Namaste reached a legal settlement with ousted CEO Sean Dollinger. Under the deal’s terms, Dollinger will drop his lawsuit against the Canada-based cannabis e-commerce platform and will act as a senior advisor.
Namaste has tapped its director Branden Spikes, former chief information officer at Elon Musk’s SpaceX, as chairman of the board.
New auditor
Meanwhile, PricewaterhouseCoopers LLP will no longer be acting as the company's auditor. The audit committee and board have accepted PwC's resignation and are in discussions with a potential new auditor. The company's annual financial statements are due to by March 31, 2019 but the company said it believes that it is unlikely it will be able to meet the filing deadline. The company said it would update the market in due course.
The company also terminated its agreement with ORH Marketing Ltd and the management believes that the end of the marketing initiative would result in annual cash savings of approximately $3 million.
Brazilian sales update
The company has decided to temporarily suspend the sale of all of its products in Brazil pending a full compliance review. Sales of such products in Brazil are expected to represent approximately 8% of the company's estimated revenue globally for the 15 months ended November 30, 2018.
READ: Namaste sees green in edibles, buys a stake in Choklat for C$1.5M
Separately, Namaste also announced Wednesday that it has entered into a share purchase agreement to acquire 49% of Alberta’s Choklat Inc for C$1.5 million in cash.
As part of the acquisition, Namaste will be appointing a member to Choklat’s board.
"Choklat is a great acquisition for us with a vast offering of existing products that can be easily infused with THC or CBD and sold as edibles," said Meni Morim, interim CEO at Namaste Technologies. "Their small batch manufacturing model is a great fit within the new proposed regulations for edible cannabis products.”
A report found that six out of 10 consumers are expected to choose edible cannabis products
The Toronto-based company, which has been described as the “Amazon of cannabis,” operates the largest global cannabis e-commerce platform with over 30 websites in more than 20 countries under a variety of brands.
In addition to its product offerings of vaporizers, glassware, accessories and CBD products, the company is also involved in the world of medical cannabis, through its licensed subsidiary CannMart Inc, not to mention its efforts in artificial intelligence, cannabis strain research and a global telemedicine app, as well as sales of medical cannabis from its facility in Toronto.
-- Adds details on Brazilian sales, auditor, marketing initiatives, Choklat stake --
Contact Uttara Choudhury at [email protected]
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