The explosion of the cannabis industry in Canada has led to the emergence of many new businesses surrounding the industry and one of them is online retail for cannabis products. It is, without a doubt, a novel idea and one that would eventually pay off, because of the rising demand of cannabis product and accessories. One of the major names in the cannabis online retail space is Toronto based Namaste Technologies Inc. (TSXV:N) (OTCQB:NXTTF) and considering the line of business the company is in, one would expect them to do well. However, there are some burning issues with the company that could prove to be the undoing of Namaste Technologies in the long run.
Back in 2018, Namaste Technologies seemed to be the next big thing in the cannabis retail space after it recorded staggering growth of 300% in August and generated revenues to the tune of $1.65 million. All the revenues came from its interests in a range of website in Canada. Following in the tradition of major cannabis companies eventually heading to Nasdaq for raising more capital, Namaste Stock did the same but that is when the company’s hidden skeletons came to the fore.
Citron Research published a report in which it stated that the upper echelons of the company’s management were involved in large scale fraud. Namaste responded with legal proceedings against its CEO, who was eventually fired and made widespread changes at the board level. However, the company has had a disastrous run in 2019 and is yet to file its earnings report for the February quarter.
Amidst the general meltdown in the company’s standing, Namaste Technologies has also been grossly negligent of providing updates on its corporate situation for quite some time. Other than the update regarding the addition of a board member and then his installation as the chief of the audit committee, no big updates have been forthcoming.
The search for a new CEO is likely still going on but there is no clarity on the matter and an interim CEO is still doing the job. Last but not the least, without further clarity on its earnings and the appointment of a new CEO, it is highly unlikely that the company is going to be looked upon favourably by Wall Street.
Namaste stock has tumbled over 80% from its from its all time high of $3.05.