Looking for Low-Priced Pot Stocks? Read This
The momentum is strong with the U.S. stock market. In recent weeks, the Dow Jones Industrial Average, the S&P 500, and the Nasdaq Composite have all soared to new highs.
But not every sector got to enjoy this round of rallies. Pot stocks, for instance, remain deep in the doldrums at the moment.
To give you an idea, the North American Marijuana Index tumbled more than 50% over the past six months. Ouch! (Source: “North American Index,” The Marijuana Index, last accessed November 14, 2019.)
Among the beaten-down tickers is Namaste Technologies Inc (OTCMKTS:NXTTF, CVE:N), a marijuana e-commerce company headquartered in Toronto, Ontario, Canada. In the past six months, NXTTF stock has plunged more than 40%. Year-to-date, it’s down more than 60%.
Trading at just $0.29 per share, NXTTF is one of the cheapest pot stocks on the market in terms of nominal share price.
But before you walk away from Namaste Technologies stock, here are a few things to take note.
First, Namaste is not the usual pot company that grows and sells marijuana. Instead, as I mentioned earlier, it is a marijuana e-commerce company.
Namaste’s online cannabis store “CannMart” has the first Canadian medical-sales-only marijuana license. Today, CannMart is a leading online platform for cannabis products, accessories, and education.
And now, Namaste Technologies could be ready take CannMart’s business to the next level.
A New Catalyst for Namaste Technologies Inc?
Namaste Technologies recently announced that CannMart signed a supply agreement with the Ontario Cannabis Retail Corporation, which operates as the Ontario Cannabis Store (OCS). (Source: “Namaste’s CannMart Signs Supply Agreements with the Ontario & Saskatchewan Provincial Agencies,” Namaste Technologies Inc, November 12, 2019.)
You see, Ontario is the most populous province in Canada. And while the country legalized recreational marijuana in October 2018, it’s not easy to become a legal vendor.
In Ontario, the OCS acts as the only legal online retailer and wholesaler for recreational pot. Therefore, entering into a supply agreement with the OCS could substantially expand Namaste’s customer base.
At the same time, CannMart has also registered with the Saskatchewan Liquor & Gaming Authority (SLGA) to sell cannabis products to permitted wholesalers in the province of Saskatchewan.
“Working directly with the provincial governments represents a significant market opportunity for us,” said Namaste Technologies Inc’s Chief Executive Officer Meni Morim.
“We look forward to being part of the value chain for OCS and SLGA as we expand our presence in this sector.” (Source: Ibid.)
An Expanding E-Commerce Platform
Mind you, these are not the only achievements of CannMart. Back in September, Namaste announced that CannMart received a purchase order for pre-rolled pot from the BC Liquor Distribution Branch (LDB). (Source: “Namaste’s CannMart Secures Order from Province of British Columbia,” Namaste Technologies Inc, September 16, 2019.)
The LDB is the only wholesale distribution and public retailer of non-medical cannabis in British Columbia, the third most populous province in Canada.
Then, in October, Namaste received approval from Health Canada to sell cannabis oil concentrates on its CannMart e-commerce web site. (Source: “Namaste’s CannMart Receives Health Canada Approval for the Sale of Cannabis Oil Concentrates,” Namaste Technologies Inc, October 15, 2019.)
And while legally buying pot online is still a relatively new thing, Namaste Technologies Inc has done a pretty good job at monetizing its e-commerce platform.
In the third quarter of Namaste’s fiscal-year 2019, which ended August 31, revenue generated by CannMart grew by four times year-over-year. (Source: “Namaste Technologies Reports Q3 2019 Financial Results,” Namaste Technologies Inc, October 29, 2019.)
Notably, CannMart’s online customer conversion rate from “Namaste MD,” the company’s integrated telemedicine application, came in at more than six percent, marking a substantial improvement. In the year-ago period, the conversion rate was less than one percent.
Namaste Technologies Inc (OTCMKTS:NXTTF) Stock Chart
Chart courtesy of StockCharts.com
Ultimately, with stock market sentiment continuing to be bearish toward the marijuana industry, it’s hard to say when Namaste Technologies stock will make a comeback.
But given the growth potential of the company’s e-commerce platform CannMart, I’d say NXTTF stock deserves a spot on a pot stock investors’ watch list.