Namaste Technologies Inc (CVE:N) (OTCMKTS:NXTTF), the cannabis-focused online platform, is set to lend C$300,000 to Choklat, an Alberta-based craft chocolate manufacturer to "maximize the pending market opportunity for edibles", the company said.
Namaste currently holds a 49% interest in Choklat and revealed it had now struck a secured convertible loan deal.
READ: Namaste Technologies looks to become the ‘Amazon of cannabis’ with its integrated, intelligent cannabis experience
The loan bears interest at a rate of 12% per year and the principal and all accrued interest are payable up to December 31, 2020.
If Choklat fails to repay any principal or interest, it will automatically convert into common shares of Choklat at a deemed value of $0.152 each.
Choklat, the largest premium craft chocolate maker in Canada, has also granted to Namaste a security interest in all its present and after-acquired property for five years.
"We're investing in Choklat to ensure they're able to maximize the pending market opportunity for edibles," Meni Morim, chief executive at Namaste Technologies Inc, told investors.
Supply deal with Sobeys
Choklat has existing sales through its online eCommerce site and through a network of distributors across Canada. It has struck a supply deal with Sobeys and already has products in 25 stores in Alberta and aims to roll out in Western Canada and beyond in the coming months.
Namaste said Choklat had 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.
Contact the author at [email protected]