New Namaste CEO remains focused on rapid growth and acquisitions
New Namaste CEO remains focused on rapid growth and acquisitions
TIM LEEMASTER
New Namaste CEO Meni Morim
Namaste Technologies, the Toronto, Canada-based cannabis company using AI, remains focused on growing rapidly and acquisitions, new CEO Meni Morim told Eye on A.I. in a recent interview.
“We will continue to look at acquisitions [but they] have to accelerate or solidify our value proposition,” Morim said.
The company had a cash pile at the end of the second quarter of CAD 55.8m which should last well into 2020, according to a Motley Fool report in July, but more acquisitions could mean the company would have to raise capital sooner.
In October last year, Namaste upsized a follow-on offering to USD 51.75m from the original USD 45m.
In March the company said it was acquiring a 49% stake in chocolate maker Choklat for USD 1.5m in cash. In December Namaste paid USD 250k for a 3% stake in Kief Cannabis. It has also recently raised its existing stake in Pineapple Express Delivery.
Morim was promoted to CEO in June. He had joined the company in 2018 through the acquisition of his e-commerce company Findify and had been serving as interim CEO since February.
The company parted ways with its founder and CEO Sean Dollinger earlier this year as a result of regulatory investigations in both Canada and the US that developed after it came under a short seller attack from Citron Research, which said a 2018 sale of the company’s US business went to a related party.
The company, which trades over the counter, settled with both regulators for almost USD 5m in total in July without admitting liability.
Namaste has developed an app called Uppy that allows users to input personal data, symptoms they are looking to treat, type of cannabis they have used and their attitude towards the results.
Algorithms the company has developed with reinforced learning can then make predictions on what cannabis strains might be best so others can get to the strains that are best suited to them more quickly.
“We’re trying to replicate the traditional physician process,” Morim says, where a prescription is suited to the patient’s symptoms.
The company has three AI experts in house using Scala for unstructured data and Python for proprietary algorithms. In total it has about 100 employees, Morim said.
The legal cannabis industry is still struggling to compete with the black market, an issue most supporters of legalization failed to anticipate. That’s in part because the black market can still offer better quality and more variety at a cheaper price, Morim says. “It’s inhibiting growth for everyone,” he adds.
One area legal producers are looking at to get an edge against black market operators is craft marijuana, much like in the beer industry where small operators took on brewing giants with niche products and less well known but historically important styles of beer.
Canada’s latest relaxation in cannabis oversight comes into effect with an October 17 law and allows for the sale of edible, topical and extract products. That, both the government and legal retailers hope, might start to change the dynamic more in favor of the legal market.
Namaste also sells vaporizers and accessories billing itself as a complete cannabis marketplace. A recent scare on the potential dangers of vaping, where over a dozen people in North America have died in illnesses related to the practice, has led several state governments in the US and Canada to limit or ban vaping. Most of the reported cases that have developed have been tied to marijuana.
Mani said that underscored the need to develop the legal market faster and better so marijuana was better regulated.
“This is the fastest growing industry on the planet.”