YourWay Cannabis Brands Inc. (CSE: YOUR)(OTC: YOURF) has been delayed in issuing its financial reports because it can’t find an auditor. The company said that since the resignation of its previous auditor Macias Gini & O’Connell LLP in December 2022, it hasn’t been able to find a replacement. Since YourWay is a Canadian public company, the auditor needs to be registered with the Canadian Public Accountability Board to be able to accept an engagement.
The company has yet to release its 2021 or 2022 earnings statements.
The company said in a statement, “To date, we have contacted 31 firms to gauge their interest in the engagement. Unfortunately, many firms we spoke with indicated an unwillingness to accept the engagement for the reasons MGO resigned, as described in our press release dated December 20, 2022. Other reasons cited by firms included capacity constraints or their policies of not working with cannabis companies in the United States based on federal cannabis laws. We want to reassure our stakeholders that we remain committed to finding an auditor, and our search is ongoing.”
Of course, numerous cannabis companies based in Canada have been able to secure auditors. MGO quit because it said it couldn’t determine the source of cash deposited by the previous CEO of YourWay on three separate occasions. As per MGO’s letter, there were concerns over the inability to corroborate “that the cash came from the proceeds he received when the CEO’s former company, Labtronix, was acquired by the company.”
The company is attempting to inform shareholders by noting that the market conditions in Arizona have softened considerably, impacting the company’s sales levels. YourWay also said it was having trouble collecting a significant amount owed to the company by one customer.
The statement said, “Revenues continue to be challenged, primarily driven by the shift in market conditions that led us to engage in opportunistic bulk distillate sales. In fiscal 2021, distillate sales represented approximately 50% of the company’s sales, which declined throughout fiscal 2022 due to significant price pressures, margin compression, and the downward trend in biomass pricing. We continue to work on solutions internally and with partners to provide a low-cost alternative to compete with the influx of cheaper bulk material in the marketplace.”
In more revenue troubles, the company said that in fiscal 2022, sales of its butane products declined by about 40% but remains the highest-performing category. “In addition, sales of our vape cartridges dropped by approximately 19% in fiscal 2022 as compared to fiscal 2021. The overall sales decline in our branded products results from the large multi-state operators vertically integrating their operations to offer more of their own branded products.”
YourWay said that due to the revenue problems and bills it owes to vendors, it has made some changes like cutting back on low margin sales and setting up new supply arrangements.
The company said it would hold a forum for shareholders on June 6.
“This forum reflects our ongoing commitment to transparency and accountability in our communications with all stakeholders,” said Acting Chief Executive Officer, Jakob Ripshtein. “We value your continued support as we strive to build a stronger, more resilient company, and we are eager to share our progress with you.”
The company continues to launch new products and make new hires despite the company’s inability to address its accountant issues.