Weekend Unlimited Inc (CSE:POT) (OTCMKTS:WKULF) revealed Friday that it has negotiated a loan repayment for $650,000, plus interest of $33,750, which were tied to the Northern Lights Supply retail operation in Alberta.
In a statement, the Vancouver-based company said that the previous leadership had explored the opportunity to own up to 49% of the Northern Lights Supply store in Alberta, but it “no longer fits” into Weekend Unlimited’s “highly focused priorities.”
As outlined in the company's shareholder letter in December 2019, management has now aligned operations to get the most out of its US branded product strategy and ramp up its Canadian Northern Lights Organics hemp farm into full production for the 2020 growing season.
“At this time a retail operation in Alberta is not a core business objective and, as a result Weekend leadership has negotiated an early repayment of the loan,” said the company.
The move naturally strengthens the company’s cash position, allowing it to dedicate its resources to core objectives.
"We cannot foresee a near term revenue opportunity from a continued relationship with Northern Lights Supply as the structure of the arrangement that had been put in place was equity based," said Weekend Unlimited CEO Chris Backus.
Deploying resources to revenue-producing assets
"This move strengthens our cash position, and most importantly allows us to deploy our resources to better revenue producing assets, specifically, branded product growth in the US and readying the Northern Lights Organics property in Canada," he added.
In the agreement, announced on November 20, 2018, the companies entered into a convertible secured 6% interest loan facility for up to $1,200,000, of which the company advanced $750,000. At any time during the term of the agreement, which was to end on December 31, 2022, the company had the option to convert the full amount of its $1,200,000 loan facility into 49% equity of the retail store, dependent upon winning the approval of the Alberta Gaming and Liquor Commission.
"We wish the team at Northern Lights Supply the best, with a shared and full understanding that the opportunities that presented themselves a year ago, in a very different environment in the sector, are not the same as we face today,” said Backus.
“As noted previously, my mandate on behalf of shareholders is drive shareholder value and to do that we must deploy resources to revenue producing assets, which this move helps to accomplish," he added.
Branded product growth in the US
In an end-of-year letter to shareholders, Backus emphasized branded product growth in the US, an online CBD shop and Northern Lights Organics as a Canadian revenue generator.
In the US, the company launched in Washington State earlier this year and recently established a similar presence in Oklahoma. In six months, Backus said, the company created, developed and launched its WKND! and Orchard Heights branded product lines.
In Canada, the company’s Northern Lights Organics farm in Fort St. James, British Columbia received certified organic status this year and is poised to grow organic hemp at scale in 2020, Backus said.
Contact the author Uttara Choudhury at [email protected]
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