Many stocks from the cannabis industry rebounded in January, and one of the stocks to have made highly impressive gains was that of Namaste Technologies (TSXV:N) (OTCQB:NXTTF). The cannabis e-commerce company saw Namaste stock gain as much as 88% over the course of January, and it is important to take a closer look at what happened.
The major trigger for the rally in the stock came about after Choklat was granted the coveted Health Canada license to manufacture cannabis-based chocolates, sugar, and other products. It is a significant development for Namaste Technologies since it owns a 49% stake in Choklat.
It is particularly important due to the legalization of cannabis derivative products in Canada last year, and Namaste can cash in on this through its holding in Choklat. The Chief Executive Officer of Namaste, Meni Morim, stated that the products manufactured by Choklat are going to be introduced into the market at some point in March.
The past few months have been particularly good for Namaste Technologies as it has expanded its business considerably and also tied up important collaborations in order to further grow its online cannabis marketplace. Morim also stated that there is ‘pent-up’ demand for edibles in Canada, and it seems that the market believes so as well.
At the time of writing, Namaste stock is trading higher by 7.55% at $0.57 on the CSE.
While these developments are definite positives for the company, there are some things that could sweeten the pot further for those who are tracking the stock. Experts believe that Namaste’s decision to enter the recreational marijuana market could result in strong revenue growth in the near term. Namaste Technologies is also going to deliver the first of many orders to the province of British Columbia.
In addition to that, it has also signed a similar agreement with the state of Ontario and Saskatchewan. All these agreements are expected to boost Namaste’s revenues further.
Last but not the least, Namaste usually gets a boost in sales during Black Friday and Cyber Monday. The sales from 2019's period are going to be reflected in the upcoming earnings report.
Despite the recent rally, experts believe that Namaste stock could at best be a speculative buy at this point.
Featured image: Canva