'The cannabis market has changed significantly over the past year, and we recognize that our initial capital-intensive strategy no longer makes sense in this environment,' CEO Khurram Malik said
Biome Grow Inc () (OTCMKTS:BIOIF), a Toronto-based cannabis company, has announced a series of changes to certain initiatives, strategic investments and proposed relationships, shifting its strategy in light of recent market turmoil.
"The cannabis market has changed significantly over the past year, and we recognize that our initial capital-intensive strategy no longer makes sense in this environment," CEO Khurram Malik said. "As a result, we have had to make difficult decisions in order to move the business in a different direction. We are working closely with stakeholders and creditors as Biome is straddled with significant liabilities and obligations inconnection with these projects."
Red Sands
Biome has opted to no longer pursue its initiative with Red Sands Craft Cannabis Company Inc, a cannabis producer incorporated in October 2018. The business had not begun execution on its proposed extraction facility, so no significant write downs are expected, Biome said.
Weed VR
The company acquired the multi-platform virtual catalog system Weed Virtual Retailer Inc in June, 2018. The firm was designed to educate, engage and inform users regarding cannabis products.
Biome expects to write down Weed VR to zero in its year-end financial statements.
CBD Acres
Biome entered a memorandum of understanding (MOU) with CBD Acres Manufacturer Inc in February 2019 to provide the company with preferential access to CBD concentrate. The two parties have mutually agreed to end the MOU.
The company said it does not plan to pursue physician-led medical cannabis and/or cannabinoid clinics at this time.
St.Francis Xavier University
The company entered a partnership with the university in December 2017 and conducted a range of cannabis-based research initiatives over the past three years. The company is terminating the partnership and said it decided not to pursue any research-based initiatives.
Highland Grow
Highland Grow Inc, a wholly owned Biome subsidiary, is a licensed cannabis cultivator and producer. Biome has opted not to go forward with an expansion of Highland’s Nova Scotia facility.
Accordingly, Biome repaid $1 million of the $3 million debt financing announced in November.
Back Home and Great Lakes Cannabis
The company is undergoing a strategic review of Back Home Medical Cannabis Corporation and Great Lakes Cannabis Company Inc, two wholly owned subsidiaries which have not yet been granted cannabis licenses.
The company is exploring options regarding Back Home with its shareholders and has redeployed its balance toward Highland Grow initiatives in the meantime.
Biome has also halted construction at the Great Lakes facility and reduced its headcount to zero. The company expects a significant write-down.
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