Lifeist Wellness Inc. has commenced restructuring proceedings pursuant to the Bankruptcy and Insolvency Act for one of its wholly owned subsidiaries, CannMart Labs Inc.
Lifeist announced its plans to divest and sell all of its shares of the CannMart Group in February to a BC company affiliated with Tierra Corp for $5 million. However, that proposed sale was rejected by Lifeist’s shareholders in a meeting in March, with the Board of Directors promising to explore every alternative avenue to adapt and restructure the CannMart Group.
In a press release on April 3, Lifeist emphasizes that the newly-announced restructuring does not impact CannMart Inc., the company’s flagship subsidiary and a leading distributor of licensed and in-house branded adult-use cannabis and cannabis-derived products in Canada.
The move will help Lifeist to better “streamline” their operation.
“Following a thorough financial and strategic review, we believe that it is in the best interest of shareholders for CannMart Labs alone to enter into restructuring proceedings in order to address its obligations and contributions to Lifeist’s balance sheet,” said Meni Morim, CEO of Lifeist.
“We are fully committed to streamlining the operations of our cannabis divisions to better meet the present moment in the industry and are optimistic that this restructuring of CannMart Labs will allow Lifeist’s cannabis operations to unlock greater shareholder value. We expect that these proceedings will have no impact on the day-to-day operations of CannMart Inc. or any of our other operating divisions.”
Lifeist’s most recent quarterly report for the three and 12 months ended November 30, 2023 (Q4 2023) showed net revenue was $4.7 million in Q4 2023, a decline from $6.2 million in Q4 2022. The company attributes this to “continued supply chain challenges impacting CannMart’s cannabis revenue in Q4 2023, as compared to Q4 2022.”
Lifeist reported a net loss for the year ended November 30, 2023, of $14.1 million, including nearly $6 million in excise and a $15.4 million loss in the same period in 2022.
As of November 30, 2023, Lifeist had a deficit of $206,192,203 (2022-$192,066,533) and a working capital deficit of $290,870 (2022-$7,937,326 surplus).
The company’s goodwill and intangible assets comprise two cash-generating units: Australian Vaporizers and CannMart. CannMart operates as CannMart, CannMart Marketplace, CannMart Labs, 1000501971 Ontario Inc (Zest), and CannMart MD. Australian Vapes is an online vape retailer.
Net revenue from CannMart in 2023 was $13.5 million, which came from sales to its major wholesale customers, but it reported a net loss of $6.3 million.
