Is Namaste Technologies Inc (OTCMKTS:NXTTF) Less Vulnerable to a Coming Cannabis Correction?

Is Namaste Technologies Inc (OTCMKTS:NXTTF) Less Vulnerable to a Coming Cannabis Correction?

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Shares of Namaste Technologies Inc (OTCMKTS:NXTTF) caught a big bounce on Wednesday, coming off moving average support on strong volume. We continue to see this as a core Canadian cannabis story that has slightly different market positioning and will be less likely to suffer on a drop in cannabis prices, which seems inevitable as capacity investment continues to soar.

In addition, the company just signed a medical cannabis agreement with Rocky Mountain Marijuana Inc., which is a subsidiary of RMMI Corp. (CSE:RMMI). According to the agreement, NXTTF’s subsidiary, Cannmart, will purchase “medical cannabis from Rocky Mountain to offer in its online medical-cannabis marketplace.  The medical cannabis supply agreement contains standard rights and obligations by each of Cannmart and Rocky Mountain including termination rights by either party.”

Namaste Technologies Inc (OTCMKTS:NXTTF) promulgates itself an emerging leader in vaporizer and accessories space. Namaste has 30 e-commerce retail stores in 20 countries, offers the largest range of brand name vaporizers products on the market and is actively manufacturing and launching multiple unique proprietary products for retail and wholesale distribution.

NXTTF is currently focused on expanding its product offering, acquisitions, and strategic partnerships, and entering new markets globally.

According to company materials, “Namaste Technologies is Your Everything Cannabis Store. Namaste operates the largest global cannabis e-commerce platform with over 30 websites in 20+ countries under various brands. Namaste’s product offering through its subsidiaries includes vaporizers, glassware, accessories, CBD products, and the company will soon be selling medical cannabis in the Canadian market, subject to approval by Health Canada. Namaste has developed and acquired innovative technology platforms including NamasteMD.com, Canada’s first Health Canada compliant telemedicine application, and in May 2018 the Company acquired a leading e-commerce AI and Machine Learning Company, Findify AB. Findify uses artificial intelligence algorithms to optimize and personalize a consumer’s on-site buying experience. Namaste is focused on leveraging its cutting-edge technology to enhance the user experience throughout its platforms. Namaste will continue to develop and acquire innovative technologies which will provide value to the Company and to its shareholders as well as to the broader cannabis market.”

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As noted above, NXTTF just signed a medical cannabis agreement with Rocky Mountain Marijuana Inc., which is a subsidiary of RMMI Corp. (CSE:RMMI), whereby its Cannmart subsidiary will purchase cannabis for sale.

According to the release, “RMMI is an Alberta-based company focused on the production, cultivation and sale of medical marijuana in various forms. RMMI, through its wholly-owned subsidiary, Rocky Mountain is a late stage applicant under the Access to Cannabis for Medical Purposes Regulations (Canada) and is in the process of obtaining the requisite license to commence cannabis production and operations.  Rocky Mountain blends science with nature using aeroponic cultivation and CO2 extraction. Rocky Mountain intends to produce high-purity, organic-quality cannabis oils. Its team will employ leading, commercially-available science and technology to maximize production yields and product quality as a low-cost producer, while reducing risk to its crops and its business.”

Shares of NXTTF just bounced at key moving average support on a pullback that we highlighted several days ago. This new arrangement will continue to push what we believe continues to be one of the more interesting supply chain stories around, as Cannmart positions for retail cannabis sales with wide distribution.

“We are extremely pleased to have been chosen as a supplier to Cannmart. RMMI’s goal of supplying the highest organic-quality cannabis products by “Blending Science with Nature” and using aeroponics cultivation systems, complements Namaste’s approach to employing advanced technology to best serve its rapidly-growing customer base,” said Earl Connors, President and CEO of RMMI. “RMMI looks forward to exceeding Cannmart’s expectations and expanding its relationship with Namaste.”

Currently trading at a market capitalization of $539.13M, NXTTF has a store ($471K) of cash on the books, which compares with about $1.1M in total current liabilities. One should also note that debt has been growing over recent quarters. NXTTF is pulling in trailing 12-month revenues of $5.6M. In addition, the company is seeing major top-line growth, with y/y quarterly revenues growing at 173.1%. This may be a very interesting story and we will look forward to updating it again soon. Sign-up for continuing coverage on shares of $NXTTF stock, as well as other hot stock picks, get our free newsletter today and get our next breakout pick!

Disclosure: we hold no position in $NXTTF, either long or short, and we have not been compensated for this article.

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