Namaste Technologies Inc. provided an update on in its investment portfolio including Choklat Inc. and Pineapple Express Delivery Inc.
Choklat, in which Namaste acquired a 49% interest in March of 2019, has now completed and submitted its evidence package to Health Canada. Choklat has seen significant expansion while preparing for the legalization of edibles, with non-infused products now available in over 150 retail outlets across Canada, including an increasing number of Safeway and Sobeys’s stores in Western Canada. Choklat is making every effort to ensure that it can smoothly transition its business activities to a new facility nearby, transforming its current space into a state-of-the-art edibles processing facility.
“The submission of an evidence package to Health Canada is a major milestone for Choklat, and what we believe to be one of the first completed applications in the industry,” said Meni Morin, Interim CEO of Namaste Technologies. “Regulation changes announced by Health Canada in May require operators to have built a compliant facility before filing for a licence. By making a strategic investment in Choklat, and converting their existing facility, Choklat will be better prepared to meet these changes and go to market timeline. Pending approval from Health Canada, we anticipate production to begin immediately, potentially making Choklat one of the first to have product on the shelves.”
“Our team has worked diligently to grow our existing business, and ensure we are ready for potential legalization in October,” said Brad Churchil, CEO of Choklat. “Choklat currently has a non-binding agreement for edible products from a Montreal based company totaling over $3 million. Upon approval from Health Canada, we look forward to scaling rapidly to deliver on our commitments, while maintaining a focus on providing the premium product our customers know and love.”
Namaste also announces the advancement of funds related to a promissory note for Pineapple Express Delivery Inc. (“Pineapple Express”) for a total of $1,200,000 USD. The promissory note is due on March 31, 2020 and bears a 12% interest rate per annum. Under the original agreement dated July 8, 2018 Namaste has the opportunity to convert the loan into equity on August 14, 2019. If the agreement is executed, Namaste would hold a majority position in Pineapple Express.
“Cannabis delivery services provided by Pineapple Express complete our unique end-to-end business proposition and support our focus on the customer experience,” said Meni Morim, Interim CEO of Namaste Technologies. “Funding provided to Pineapple Express will allow them to scale and expand their presence, providing a seamless user experience for customers across Canada.”
On December 17, 2018, Namaste Technologies entered into a share purchase agreement to acquire common shares in Pineapple Express Delivery and an affiliated entity, representing an additional 34% equity in exchange for such number of common shares of Namaste having an aggregate value of approximately $3.1 million. The transaction closed on March 13, 2019 with Namaste now owning 49% of the issued and outstanding common shares of Pineapple Express.