Biome Grow Inc (CSE:BIO) (OTCMKTS:BIOIF), the cannabis company, said it has terminated a supply deal with the Province of Newfoundland and Labrador, which was announced in 2018, but added that it does not believe it will materially affect the firm's business, operations or results.
Two years ago, Biome Grow subsidiary Back Home struck a 24,000 kg three-year deal with the Province and the Newfoundland and Labrador Liquor Corporation (NLC) to produce and supply cannabis product to the province's market. It also meant Biome Grow had access to five retail licenses.
In a statement on Tuesday, Khurram Malik, the chief executive of Biome Grow said: "Understandably, we are all disappointed that things did not work out as originally planned.
"However, it's evidently clear, the cannabis market, and markets in general, have changed significantly over the past year. It would be foolish to continue on a previously announced path when it's clear the strategy no longer applies given the environment."
Malik added that despite the firm's reductions in capital expenditures, the group was continuing to expand its distribution network, both geographically, into new markets, and interprovincially, via new retailers.
"Further, instead of spending tens of millions of dollars on facilities that no longer make sense, we've been able to realize tangible gains by focusing on operational efficiencies," he said.
Biome added that notwithstanding the end of the deal, and despite enormous changes to the market, it remains committed to the Canadian province and continues to explore various options in a collaborative manner with its stakeholders.
Shares advanced 10% in Toronto to stand at C$0.050 each.
---Updates for share price---
Contact the author at email@example.com