Namaste Tech’s Moves Beginning To Show Promise

Namaste Technologies Inc.  (OTCMKTS: NXTTF) reported net revenues of $6.9 million for the second quarter ended May 31, 2020, which was a 73% increase over the same period last year, and a 31% sequential increase over the first quarter of 2020. The company trimmed its net losses to $4.8 million from last year’s $8.6 million in the same quarter. The company said that the improvement reflected CannMart’s introduction of new distribution channels, restructuring efforts in 2019, and resulting business improvements in 2020.

“The introduction of B2B distribution channels by CannMart has made a significant contribution to Namaste’s revenue stream and bottom line,” said Meni Morim, CEO of Namaste. “For the second consecutive quarter, we have seen considerable revenue growth and have just recorded the highest quarterly revenue for the Company to date. As stated in the first quarter, the strategic decisions we made in 2019 and early 2020 are beginning to be reflected in our results. Our efforts have resulted in significant growth for cannabis and cannabis products sales in Canada but there is more work for us to do. We have shown that we can grow our revenue and as we expand our product lines, improve operational efficiencies, and increase our gross margins in coming quarters to coincide with revenue growth.”

New Focus Paying Off

Revenue Shifting towards Cannabis (CNW Group/Namaste Technologies Inc.)

Namaste has struggled over several quarters as the company recovered from the resignation of its founder Sean Dollinger and a move to refocus its efforts on revenue. The company shifted towards a targeted approach to Canada and an increased contribution from CannMart. 48% of the second-quarter 2020 net revenues were derived from Canadian clients compared to 19% from the same period in 2019. This was a 338% increase in quarter over quarter revenue, reflecting the efforts made on growing the company’s market share within the Canadian market.

“As Canada is leading the way with respect to the rollout of regulations around a legal cannabis market, and with other countries paying close attention to this rollout, we set out to refine and perfect the scalability of our business model within this legal framework. The work and investment that we have made and will continue to make in Canada will provide a playbook for eventual expansion into other markets and verticals as regulations allow,” added Morim.

CannMart Adds To The Mix

CannMart Inc. expanded its product catalog and grew in both its business to business and business to consumer channels. CannMart’s revenue increased 82% on a sequential basis from Q1 to Q2 2020. Over 33% of second-quarter 2020 revenue was derived from cannabis and cannabis products compared to under 5% for the same period in 2019.

“The introduction of B2B distribution channels by CannMart has made a significant contribution to Namaste’s revenue stream and bottom line,” said Meni Morim, CEO of Namaste. “For the second consecutive quarter, we have seen considerable revenue growth and have just recorded the highest quarterly revenue for the Company to date. As stated in the first quarter, the strategic decisions we made in 2019 and early 2020 are beginning to be reflected in our results.”

Overall expenses decreased by $241,913 or 4% for the second quarter reflecting a decrease in share-based compensation and selling and marketing expenses offset by an increase in office and general costs

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