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Namaste sees green in edibles, buys a stake in Choklat for C$1.5M

CEO Meni Morim says Choklat is a ‘great acquisition’ with its vast offering of existing products that can be easily infused with THC or CBD and sold as edibles

A bar of chocolate
Namaste Technologies was drawn to the Alberta premium chocolate maker's small batch manufacturing model

Namaste Technologies Inc (CVE:N) (OTCMKTS:NXTTF) 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.

Calgary-based Choklat is the largest premium craft chocolate maker in Canada with existing sales through its e-commerce site and through a network of distributors across Canada. It recently entered into a supply relationship with Sobeys and has its premium chocolate bars in 25 stores in Alberta, with a planned rollout in Western Canada on the anvil.

READ: Namaste Technologies launches strategic review

"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 Deloitte report found that six out of 10 consumers are expected to choose edible cannabis products.

“This transaction provides the security of supply and manufacturing for our medicinal cannabis customers and provides capacity for the recreational market in the event proposed regulations are passed," said Morim.

Choklat has hired industry experts Cannabis Consulting Inc to assist with the procurement of a Health Canada federal processing license.

Sweet opportunity

"This is a great combination where Namaste recognizes the value of e-commerce and direct to consumer sales and has the vision to help us grow by white-labeling products for distribution through CannMart," said Choklat Inc founder CEO Brad Churchill.

Churchill has personal experience with making edibles.

"Almost two years ago I used my own prescription to personally research the concept of infusing chocolate and sugar with cannabis," said Churchill. "As one of the only chocolate makers in Canada I had access to equipment and processes that other chocolatiers and confectioners don't have. My research led me to discoveries which, when legal, will allow us to infuse both THC and CBD into chocolate and sugar in such a way that there is absolutely no discernible "weed" flavour or smell, and with a dosage accuracy that is almost pharmaceutical grade."

READ: Namaste Technologies launches strategic review

Separately, Namaste said on 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.

Toronto-based Namaste, 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 strategic review —

Contact Uttara Choudhury at [email protected]

Follow her on Twitter@UttaraProactive 

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Market Cap: $105.22 m
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