Namaste Technologies Inc. (CVE:N) is trading 15% lower than it did in May, even on serving a number of catalysts that were expected to strengthen its sentiments among investors. The stock remains under pressure, pullbacks in the recent past having emerged as selling opportunities from which short sellers have continued to push the stock lower.
However, in recent trading sessions, the stock appears to have found some form of support at the $1.30 mark, from where it is trying to bounce back. According to price action activity, the stock faces immediate resistance at the $1.50 mark on any movements on the upwards.
A rally followed by a close above the critical resistance level should open the door for the stock to make a run for the $1.60 mark, seen as the next substantial resistance level. On the downside, a break of the $1.30 level could see the stock plummeting to the $1.20 level, seen as the next support level.
Before we look at recent developments, likely to influence investors sentiments on the stock, lets first look at what the company does in pursuit of growth.
Namaste Technologies operates one of the largest cannabis e-commerce platforms that hosts over 30 websites in 20+ countries. Through its subsidiaries, the company also sells vaporizers, glassware accessories as well as CBD products.
The company is currently pursuing licenses that will allow it to venture in Canada’s burgeoning medical marijuana market. Acquisition and development of innovative technology platforms such as NamasteMD.com underscore how focused the company is about pursuing opportunities in the sector.
It comes as a surprise that Namaste Technologies has remained subdued in the market, despite reporting a 32% increase in revenue in the recent quarter. For the three months ended May 31, 2018, the company says it generated revenues of $4.1 million, which is an increase of $1 million.
Revenue for the nine months ended May 31, 2018, was up 106% to $14.6 million. The Company attributes the increase to robust organic growth as well as revenue growth from EDIT domains and Australian Vaporizers.
Buoyed by the robust revenue growth, the management team has turned its attention to expanding its diversified platform of e-commerce websites. The expansion drive seeks to position the platform as ‘Your Everything Cannabis Store’ for everything, from vaporizers to smoking accessories and CBD products.
Findify AB Acquisition
Acquisition of Findify AB, a leading artificial Intelligence software company, aligns well with the company’s expansion drive. The acquisition provides the company with access to a vital machine learning technology that can be used to track customer behavior on the e-commerce platform.
“Our Q3 financial results show continuous growth year-on-year, and this quarter also represented major milestones for the Company including the acquisition of Findify, which we believe will drive significant revenue going forward by increasing customer conversion and retention,” said CEO Sean Dollinger.
Namaste Technologies is currently exploring ways to integrate Findify technology in real-world applications with focus being on understanding customers’ needs in the cannabis space.
Uppy AI Mobile App
Namaste Technologies has also sought to differentiate itself from other players in the industry by making good use of emerging technologies such as Artificial Intelligence. The company has already submitted an application for the listing of its AI-powered Uppy cannabis Journal app on Apple and Google Play store.
The first of its kind, the cannabis driven medical app is designed to collect feedback on various cannabis strains over time, as well as cannabis hardware recommendations. The company has already fed over 2 million pieces of unique data to the platform through its Findify AB subsidiary.
The primary goal with the app is to provide patients with the best cannabis strain recommendations depending on their needs and based on data collected from other users.
NASDAQ Listing Push
Namaste Technologies is also planning to become one of the first Canadian Cannabis companies to list on the NASDAQ exchange. Listing on the exchange according to the Chief executive officer will go a long way in supporting the company’s anticipated growth as focus shifts towards venturing into new sales channels.
Namaste Technologies is no typical cannabis company. The company has differentiated itself from the competition by unveiling valuable technology platforms for collecting valuable data, ideal for servicing the multibillion-dollar cannabis sector. A 32% increase in revenue in the recent quarter underscores a company whose strategies are paying off. Revenue could have been much higher had the company factored sales in international markets.
That said, it might be a matter of time before investors take note of how unique, the company is in the cannabis sector, a development that could help shore the stock’s sentiments in the market. Until then the stock is likely to remain in consolidation mode before spiking higher.
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Disclosure: We have no position in CVE:N and have not been compensated for this article.