United States securities and exchange commission logo
February 7, 2022
Michael Forbes
Chief Executive Officer
Adastra Holdings Ltd.
5451 - 275 Street
Langley, British Columbia V4W 3X8
Canada
Re: Adastra Holdings
Ltd.
Amendment No. 1 to
Registration Statement on Form 20-F
Filed January 21,
2022
File No. 000-56365
Dear Mr. Forbes:
We have reviewed your amended registration statement and have the
following
comments. In some of our comments, we may ask you to provide us with
information so we
may better understand your disclosure.
Please respond to this letter by amending your registration
statement and providing the
requested information. If you do not believe our comments apply to your
facts and
circumstances or do not believe an amendment is appropriate, please tell
us why in your
response.
After reviewing any amendment to your registration statement and
the information you
provide in response to these comments, we may have additional comments.
Unless we note
otherwise, our references to prior comments are to comments in our
December 7, 2021 letter.
Amendment No. 1 to Form 20-F
Risk Factors
Doing business in the cannabis industry leaves our company subject to
possible regulatory risks,
page 4
1. We note your response
to prior comment 1 and reissue in part. Please expand your
discussion in the
Information on the Company section to describe the material effects of
government regulations
on your mushroom and mushroom-derived products.
Michael Forbes
FirstName LastNameMichael Forbes
Adastra Holdings Ltd.
Comapany7,NameAdastra
February 2022 Holdings Ltd.
February
Page 2 7, 2022 Page 2
FirstName LastName
We rely on physicians and other healthcare professionals, page 9
2. We note your response to our prior comment 2 and reissue the comment
in part. Please
revise your disclosure in the Information on the Company section on
page 14 to clarify
that as part of your plans for psychedelic products you intend to
employ physicians and
other healthcare professionals at your clinics related to the
operations of Perceive MD to
provide consultations to customers regarding the benefits of using
mushroom and
mushroom-derived products.
Extraction, page 23
3. We note your response to our prior comment 5 and your revised
disclosure describing the
material terms of your brand licensing agreement with Cannmart Labs
Inc. Please also file
this agreement as an exhibit or advise us why such agreement is not
required to be filed.
See Instruction 4(b)(ii) in the Instructions as to Exhibits of Form
20-F.
Principal Markets, page 28
4. We note that in your response to our prior comment 8, you state that
"[a]s healthcare
professionals are being employed at [y]our clinics, they will provide
consultations to
patients and may market [y]our products to them depending on the
patients needs.
Therefore, the company aims to create relationships with healthcare
professionals to
support the marketing of our products, mainly through the use of
social media." Please
revise your disclosure here concerning your marketing strategy to
include this discussion
as you have provided it in your response letter.
Liquidity and Capital Resources, page 35
5. We note your response to our prior comment 10 and your amended
disclosure here stating
that you have announced a private placement financing to raise
additional funds on
November 21, 2021. To the extent that you have issued additional
shares through this
private placement, please ensure that you also amend accordingly your
disclosure
discussing recent issuances of securities starting on page 48. Refer
to Item 10 of Form 20-
F.
Item 7. Major Shareholders and Related Party Transactions
B. Related Party Transactions, page 44
6. We note your response to our prior comment 11. Given that your CEO and
Director, Mr.
Michael Forbes, is also a Director and controlling shareholder of
Sitka Weed Works Inc.,
please revise your disclosure here to discuss the nature and extent of
this agreement. Refer
to Item 7.B.1. of Form 20-F.
Michael Forbes
FirstName LastNameMichael Forbes
Adastra Holdings Ltd.
Comapany7,NameAdastra
February 2022 Holdings Ltd.
February
Page 3 7, 2022 Page 3
FirstName LastName
1204581 B.C. Ltd. - Report of Independent Registered Public Accounting Firm ,
page F-1
7. Please have your auditor to provide a consent on its audit opinion for
1204581 B.C.Ltd
dated November 2, 2021.
You may contact Christie Wong at (202) 551-3684 or Terence O'Brien at
(202) 551-
3355 if you have questions regarding comments on the financial statements and
related
matters. Please contact Jessica Ansart at (202) 551-4511 or Jeffrey Gabor at
(202) 551-
2544 with any other questions.
Sincerely,
Division of
Corporation Finance
Office of Life
Sciences
cc: Cam McTavish