Lifeist Wellness Inc. (TSX-V:LFST, OTCQB:NXTTF), previously Namaste Technologies, has announced a strategic move to realign its resources on near-term opportunities, particularly its business-to-business (B2B) recreational cannabis distribution and manufacturing business, and its recently launched nutraceuticals.
The Toronto-based company said that streamlining of its wellness strategies with “higher growth and profitability potential” represents a continuation of a renewed commitment by Lifeist to create shareholder value.
“We were proud to be one of the first companies in Canada to enter the online business-to-consumer (B2C) medical cannabis space, but the time has come to realign our focus. The regulatory and consumer conditions for medical cannabis in Canada have evolved such that achieving success would require significant and ongoing investments without a growth trajectory and near-term returns to support it,” Lifeist CEO Meni Morim said in a statement.
“We have moved decisively to realign our resources on more promising near-term opportunities, particularly our cannabis B2B distribution and manufacturing businesses, and our nutraceutical initiative, each of which enjoy a clearer path to growth with higher near-term profit potential,” he added.
Lifeist’s portfolio includes CannMart, which operates a B2B wholesale distribution business facilitating recreational sales to Canadian provincial government control boards; CannMart Labs, an extraction facility to produce high margin cannabis 2.0 products; and the CannMart.com marketplace, which provides Canadian medical customers with cannabis products.
CannMart CEO Daniel Stern said the firm struck an agreement with Medicibis, operators of Mendocannabis.ca to facilitate the transfer of its registered medical patients to Medicibis.
“CannMart’s B2B recreational cannabis platform (as opposed to its B2C medical platform), which includes the distribution and logistics business together with CannMart Labs, is the overwhelming driver of our cannabis business,” said Stern. “It’s growing to be about 90% of our cannabis revenue and has been delivering substantially all of the gross margin contribution, making the B2C business less relevant and no longer core to our long-term strategy. Formalizing this shift enables CannMart to put resources where it can create the most value.”
Meanwhile, Jay Schwartz, Chief Operating Officer of Mendo, said that providing Canadian cannabis patients a platform to purchase their medicine will always be Mendo’s focus.
“We understand that change is hard, and we look forward to earning the trust of every single CannMart patient that transitions to our platform through our compassion pricing, diverse selection of products, and unparalleled service,” added Schwartz.
Mendo said it is delighted to give patients that choose to transfer “a new home.” It will offer CannMart patients a discount of 10% on two orders of the new member's choice to ease the transition. If a patient's medical document is expired or is expiring this year, Mendo said it will cover the cost for renewal on transfer to their platform.
B2B recreational cannabis focus
Within cannabis, Lifeist’s is focused on being the top value-added distribution platform and manufacturer of higher margin cannabis products.
As a distributor, CannMart has supply agreements with provincial government cannabis control boards in the provinces of Ontario, Alberta, British Columbia, Manitoba, New Brunswick, and Saskatchewan. It has recently added Yukon, Northwest Territories and Nunavut, which constitutes access to around 73% of adult Canadians.
It is now the distribution partner for 10 LPs and 21 brands in addition to in-house brands Roilty and Mezzero and 3 licensed brands. In addition, CannMart has added J2 Science, Embark Health, TorrCann, JMF Growers family and Loosh Brands to its list of partners. TobaGrown is also under a license agreement with the firm.
Meanwhile, CannMart Labs began commercial production in November 2021 with live resin products and is now planning to develop new formats. CannMart’s B2B revenue stream represented around 90% of Lifeist’s cannabis revenue for the nine months ended August 31, 2021, said the company.
Contact the author Uttara Choudhury at uttara@proactiveinvestors.com
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