The coronavirus pandemic has unleashed a lot of volatility in the cannabis sector, and consequently, many of the stocks have performed poorly in recent days. However, at the same time, e-commerce stocks like Amazon and Spotify have performed well. Hence, it makes the cannabis e-commerce marketplace operator Namaste Technologies (TSXV:N) (OTCQB:NXTTF) an interesting proposition.
What to Expect Now?
Namaste stock has performed poorly and has lost as much as 91% of its value in 18 months. The company operates as many as 24 websites and also has five warehouses. Namaste is available in as many as 20 nations, and as such, it has an extensive operation.
Namaste sells a wide range of products starting from the dried flower, vaporizers, hemp-based pet supplements, and bongs, among others. It is also trying to deploy artificial intelligence in order to give customers a better experience. The legalization of ‘Cannabis 2.0’ products is going to swell the variety of products considerably, and the growth in this space is expected to be a major positive for Namaste. Its subsidiary Choklat is going to manufacture cannabis-based chocolates and beverages. These products will allow Namaste to enter the CBD based edibles market in a big way.
Namaste aspires to be the Amazon of the cannabis industry, and considering the fact that there are 200 licenses cultivators in Canada alone, there is an opportunity for growth. In the previous four quarters, the company reported $17.5 million worth of sales, and at the same time, it is not yet profitable. Sales fell 9% over the previous three quarters. In order to attract investors, the company would need to grow its sales and also reduce its losses progressively.
The company’s business model has a lot of promises, but at the same time, it cannot be ignored that at this point in time, Namaste’s performance leaves a lot to be desired. Hence, investors could stay away from the Namaste stock at this point despite its steep decline.