On February 1, Namaste Technologies (OTC:NXTTF) restructured their UK acquisition of AF Trading Ltd. The original deal used AF Trading as Namaste’s distributor in the UK yet would have cost Namaste $5 million. Since that original deal, the pot stock chose to go with a different distributor. Namaste will still fulfill their agreement with AF by acquiring their subsidiary CannMart UK.
Per the new agreement, Namaste is acquiring CannMart UK for $2 million, comprised of $500,000 in cash and $1.5 million in shares. The new acquisition also includes a substances license, which is necessary for the distribution and sale of cannabis products in the UK.
"As part of our 2019 strategy to re-prioritize our capital investments, we were able to successfully reduce the overall acquisition price of the Access Fulfillment transaction…” Sean Dollinger, the former CEO of Namaste, said on Friday, prior to his firing. "The UK market represents a significant growth opportunity and this acquisition remains an integral part of this growth."
[Namaste Tech fires CEO Sean Dollinger amidst allegations of fraud, breaches of fiduciary duty]
Namaste may not be the only pot stock to venture into the UK, but the restructuring of this particular acquisition has piqued the interest of many cannabis investors. The new price has many singing the pot stock’s praises; still, others are waiting to see what happens after Brexit. In the meantime, Namaste appears to remain focused on a bigger, more global picture for the brand.
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Namaste currently scouting Canadian cities for cafes while building a brand in Australia
Shortly after restructuring their latest acquisition, Namaste announced that they are currently scouting Canadian cities to launch their new Namaste Cafes.
Toronto and Montreal are at the top of the list, and the company is potentially looking at a few other cities with which to franchise. According to Namaste Vice President Darren Gill, franchising is a major component of the Cafe launch.
“We’ve really been working through trying to develop an educational kind of center for folks to be able to gather in communities and...learn about not only the benefits of medical cannabis but the applications and how it can help them with everyday living,” Gill said in an interview with Proactive Investors earlier this week.
The idea of franchising emphasizes this sense of community the company is trying to build with their modern concept. Instead of acting as a dispensary, the cafes will be used as a storefront for vaporizers and other cannabis accessories (on top of selling coffee). The idea is to create a safe space where consumers can learn about cannabis. Each cafe will be equipped with Namaste’s online suite of tools, and customers will be able to engage with doctors and specifically trained staff members at each cafe location.
Teaming up with Pete Evans, a celebrity chef out of Australia
The pot stock is also teaming up with Pete Evans, a celebrity chef out of Australia, to create and sell health food products in the cafes “with a cannabis twist.” The celebrity chef is even collaborating with Namaste CEO Sean Dollinger for a cannabis cookbook. This partnership is especially unique because it neatly positions Namaste’s distinct brand in one of the largest potential cannabis markets in the world: Australia.
“Australia is Namaste’s largest marketplace without cannabis being legal,” Dollinger told The Sydney Herald on Monday. “We expect to do $10 million here and that is just on the vaporizers side, imagine when cannabis and CBD open up. It's a very important market for us.”
Deciding to incorporate a recognizable Australian celebrity with the launch of their Canadian cafes may appear to be random on the surface, but investors should be paying closer attention to the opportunities of which Namaste is taking advantage.
Currently, the cannabis industry is lacking in a retail concept that uses educational opportunities as a means to build a consumer base. There are also very few celebrity chefs to use cannabis as a cooking herb rather than just a medicinal or recreational product. It is going to take a lot to stand out in this industry as the year continues, and Namaste is doing everything they can to make a recognizable name for themselves.
As the market starts to level out, success will be measured in more than just grams sold and strains smoked. Understanding the customer, empowering them with the tools to learn, and ultimately establishing your brand as the expert in the industry could be what wins out in this race to the top of the emerald tower.