Namaste Technologies Inc. (TSXV:N), one of the Canadian marijuana stocks, said it has dismissed its CEO with cause
SmallCapPower | February 5, 2019: Namaste Technologies Inc. (TSXV:N), one of the Canadian cannabis stocks, saw its share price slide 15% to $1.18 on Monday after the Company announced that it has dismissed CEO Sean Dollinger and has begun legal action against him for damages and disgorgement. Namaste Technologies accused Mr. Dollinger of self dealing and breaching his fiduciary duty in relation to the sale of Namaste’s U.S. subsidiary, Dollinger Enterprises US Inc., in 2017, and subsequent transactions involving its assets and companies in which Sean Dollinger and Namaste’s head of marketing David Hughes had a beneficial interest.
Timing of the move may have taken some by surprise as the Company announced a new employment agreement between Namaste and Mr. Dollinger on January 11, 2019. Shares of Namaste Technologies, however, had been down about 8% over the past 52 weeks before the CEO departure announcement on Monday.
In addition, Namaste Technologies said it would consider putting itself up for sale.
Namaste Technologies also announced recently that the approval of medical cannabis exports by the Israeli government would pave the way for importing medical cannabis to Canada and other markets through its Israeli partner, Cannbit. Namaste is one of the world’s largest online retailers of cannabis delivery systems, selling vaporizers and smoking accessories through 24 eCommerce sites across 20 countries. The Company is building a one-stop-shop marketplace for cannabis-related products, leveraging its eCommerce capabilities and existing database of Canadian medical cannabis consumers, complemented by the acquisition of cannabis distributor, CannMart Inc., in April 2017, and the launch of NamasteMD, a platform for onboarding of patients through online prescription/consultation, in early 2018.
A late-stage applicant and GMP-certified producer of medical cannabis, Cannbit boasts of a 4,000 square meters facility (expandable by another 10,000 square meters) in Neot Hakikar, Israel and intends to become Israel’s leading exporter for medical cannabis to legal jurisdictions globally. Cannbit will be producing flower and cannabis oil in-house and anticipates first exports towards the end of 2019.
Namaste owns 10% of Cannbit and has a collaboration and supply agreement to purchase medical cannabis. The approval of cannabis exports by the Israeli government would enhance Namaste’s sourcing capabilities by importing medical cannabis from Cannbit and selling it though CannMart in Canada. Additionally, Cannbit could also export medical cannabis to other international markets such as Europe, Australia and the U.S. where Namaste has leading market positions. The exports will complement Namaste’s existing supply channels in emerging markets including Brazil, Mexico and Chile. Namaste Technologies stock currently trades at a market cap of $397 million.
Disclosure: Neither the author nor his family own shares in the company mentioned above.
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