Namaste Technologies (CSE:N) has announced that it has entered into a non-binding letter of intent whereby Namaste will purchase all of the issued and outstanding shares in the capital of CannMart.
As quoted in the press release:
The Contemplated Transaction represents a significant strategic maneuver by Namaste in advance of the potential legalization and regulation of cannabis in Canada. The strategic rationale for the Contemplated Transaction includes:
- Represents a logical expansion of the product portfolio and generates additional recurring revenue streams from existing and new customers throughout Canada. Creates a one-stop shopping platform for Canadian cannabis consumers;
- Aligns with Namaste’s e-commerce capabilities and dataset of over 50,000 individuals in Canada, which represents a significant competitive advantage in terms of becoming one of the leading online retailers of cannabis;
- Complements Namaste’s distribution expertise and relationships with the location of CannMart’s proposed facility enabling same day delivery in the Greater Toronto Area and 24-hour delivery within Canada. Namaste will seek to be the leading online retailer of cannabis in terms of fulfillment and customer service; and
- Enhances the overall financial profile of the Company in terms of additional revenue and margin generation potential. Attractive non-cash purchase price based on comparable public companies within the industry.
CannMart’s ACMPR Application
CannMart’s ACMPR Application and proposed business model are unique in the industry as CannMart has applied only to sell and not produce medical cannabis. Under this model and subject to obtaining a licence from Health Canada, CannMart would have the ability to purchase wholesale medical cannabis from other licensed producers and sell to individual patients in accordance with the ACMPR.