Namaste Technologies Reports Year End 2019 Financial Results

Published: May 4, 2020

Namaste Technologies Reports Year End 2019 Financial Results

Namaste Technologies Inc., an online platform for cannabis products, accessories, and responsible education, today reported its financial results for the year ended November 30, 2019. All financial figures are in Canadian dollars unless otherwise indicated.

During the year, a strategic realignment was announced by the Board of Directors which included organization leadership changes where Mr. Meni Morim was appointed CEO to lead the organization through this transformation and into the next phase of its growth. Namaste implemented several corporate initiatives to transition the Company from its entrepreneurial roots towards its goal of becoming a leading procurement, processing and distribution company focusing on the Canadian cannabis market.

The Company took steps to streamline the organizational structure through the consolidation of certain divisions and websites while focusing on the business segments that align with the Company’s core strategy. Concurrently, CannMart Inc. (“CannMart”), a wholly owned subsidiary of Namaste, expanded its business model by entering the business to business (“B2B”) sector in mid-September and establishing sales channels between licensed producers and provincial cannabis distribution networks. CannMart continued to increase the number of premium brands and the variety of products carried on the CannMart website, and available through its B2B channel and was an early provider of Cannabis 2.0 products.

“We made significant changes to the Company in 2019 which included key investments in new business segments, settlement of outstanding class actions, replacement of executive-level positions with top talent, and restructuring legacy businesses to reposition the business to compete over the long term,” said Meni Morim, CEO of Namaste. “We believe that we’ve made tremendous strides in our operations, and have entered new markets with distribution partners. As we move forward into the year, we will focus on growing the business profitably, reducing operational burn and continuing to master the mechanism of moving cannabis into the market, safely & reliably. We were successful at launching our B2B business model in the fourth quarter, and now have supply agreements with five provinces.”

“CannMart continues to expand its portfolio offering its customers quality products from recognized brands. We have spent the last few years collecting data that we have used to build a better customer experience from end to end. With these building blocks in place, our focus is shifting to increasing revenues and gross margins for our online and B2B channels while reducing costs and improving efficiencies throughout our divisions.”

Summary of Consolidated Financial Results

Net revenue for the twelve months ended November 30, 2019 was $16.3 million, compared to $23.8 million for the fifteen months ended November 30, 2018. The change in revenue primarily reflects the sale/closure of non-core assets. Gross margin as a percentage of net revenue (before inventory adjustment) for the year ended November 30, 2019 was 17% compared to 22% for the fifteen months ended November 30, 2018. Included in the fifteen months ended November 30, 2018 were revenue and gross margin contributions from the divestitures, and therefore not included in 2019.

Share-based compensation, as part of total compensation, for the twelve months ended November 30, 2019 decreased by $19.9 million to $2.0 million compared to the fifteen months ended November 30, 2018. This reflects management’s efforts to realign and reduce its cost structure and demonstrate its increased focus on governance and related shareholder value.

Adjusted EBITDA for the twelve months ended November 30, 2019 was a loss of $23.1 million, compared to a loss of $17.9 million for the fifteen months ended November 30, 2018. Revaluation of assets and non-recurring costs associated with restructuring and legacy issues impacted the current year’s results by $32.7 million resulting in a net loss of $63.2 million compared to $41.6 million in the prior fiscal year.  The Company’s working capital position remains strong at $39.4 million with no debt obligations.

For further details, the complete Financial Statement and Management Discussion & Analysis can be accessed on the Company’s SEDAR profile at

Management Update

The Company wishes to announce the appointment of Mr. Faraaz Jamal to the position of Chief Operating Officer. Mr. Jamal has been with Namaste since May 2019. Previously Mr. Jamal served as the Head of Marketing for Bulletproof Inc., a private consumer packaged goods company, where he oversaw the doubling of new customer acquisition and the tripling of revenue, while driving bottom-line profitability, as well as acting as interim-COO of Intiveo, a SaaS based company, where he grew EBITDA by optimizing operations. Mr. Jamal replaces Mr. David Giardino who is leaving the company to pursue other interests. Mr. Giardino has agreed to stay on with the Company until May to assist with operations through the transition period.

“On behalf of the board and the employees of Namaste, I want to thank David for his dedication and commitment to our Company as COO and wish him all the best in his future endeavors,” said Meni Morim, CEO of Namaste. “Faraaz has been an integral member of the management team and has experience in successfully building companies and their related revenue. I am excited about Faraaz’s new post and look forward to seeing the impact of his enthusiasm and track record of success.”

“I have enjoyed working with the talented team at Namaste and growing the company into what it is today,” added David Giardino. “I want to thank everyone and wish them the best for the future.”

Class Action Settlement

Further to the notice filed on March 16, 2020 with respect to the settlement of the Namaste Securities Class Action lawsuit and its approval by the Ontario Superior Court of Justice, the class action is formally closed as courts in Canada and the United States have approved the settlement.

“The class action was a distraction and weight on our expenses,” added Mr. Morim. “We were able to settle the outstanding claims allowing us to refocus our efforts on changing the Company for the better in the long term.”

COVID-19 Regulatory Relief

On March 18, 2020, the Canadian Securities Administrators issued a notice stating that securities regulators will be providing coordinated relief consisting of a 45-day extension for certain periodic filings required to be made on or prior to June 1, 2020. This blanket relief, as a result of the COVID-19 pandemic, applies to reporting issuers and applies to financial statements, management’s discussion and analysis, annual information forms, and certain other ancillary documents normally required to be filed in a timely manner under securities legislation.

As a result of the pandemic’s impact on internal and regulator resources, Namaste has elected to take advantage of the blanket relief granted pursuant to BC Instrument 51-515 and Ontario Instrument 51-502 in respect of the following:

  • the requirement to file interim financial statements for the quarter ended February 29, 2020 (the “Financial Statements”) within 60 days of the Company’s quarter end as required by section 4.2(b) of National Instrument 51-102 (NI”51-102″);
  • the requirement to file management discussion and analysis (the “MD&A”) for the period covered by the Financial Statements within 60 days of the Company’s quarter end as required by section 5.1(2) of NI 51-102; and
  • the requirement to file certifications of the Financial Statements (the “Certificates” and together with the Financial Statements, the “Interim Filings”) pursuant to section 4.1 of National Instrument 52-109.

Namaste currently expects to file its Interim Filings for the first quarter ended February 29th on or by May 21, 2020.

Management and certain other insiders of Namaste are subject to an insider trading blackout which reflects the principles in Section 9 of National Policy 11-207 for until such time as Namaste has filed its Interim Filings.

Other than as previously disclosed by the Company, there have been no material business developments since the date of the Company’s most recent filing of its interim financial reports and the associate management discussion and analysis.


Management evaluates the Company’s performance using a variety of measures, including “Net loss before income tax, depreciation and amortization” and “Adjusted EBITDA”. The non-IFRS measures discussed below should not be considered as an alternative to or to be more meaningful than revenue or net loss. These measures do not have a standardized meaning prescribed by IFRS and therefore they may not be comparable to similarly titled measures presented by other publicly traded companies and should not be construed as an alternative to other financial measures determined in accordance with IFRS.

The Company believes these non-IFRS financial measures provide useful information to both management and investors in measuring the financial performance and financial condition of the Company.

Management uses these and other non-IFRS financial measures to exclude the impact of certain expenses and income that must be recognized under IFRS when analyzing consolidated underlying operating performance, as the excluded items are not necessarily reflective of the Company’s underlying operating performance and make comparisons of underlying financial performance between periods difficult. From time to time, the Company may exclude additional items if it believes doing so would result in a more effective analysis of underlying operating performance. The exclusion of certain items does not imply that they are non-recurring.




(12 months)

(15 months)

Net loss





Income tax




Depreciation and amortization







Other income 




Transaction, restructuring and other costs




Impairment of goodwill and intangibles



Impairment of loans receivable



Share of associates’ loss, net of tax  



Share-based compensation




Adjusted EBITDA





(i) Current and deferred income taxes, depreciation and amortization, and share-based compensation were excluded from the Adjusted EBITDA calculation as they do not represent cash expenditures.

(ii) Other income consisting of gain on disposal of subsidiary, interest income, realized gain on disposition of AFS investments, unrealized gain on derivatives and other miscellaneous non-recurring income were excluded from Adjusted EBITDA calculation.

(iii) Non-recurring costs related to restructuring and legacy issues were excluded from Adjusted EBITDA calculation.

(iv) Impairment loss relating to goodwill, customer list, domains and brand names were excluded from Adjusted EBITDA calculation.

(v) Impairment loss relating to receivable is a provision for expected credit loss to an associate and was excluded from Adjusted EBITDA calculation.

(vi) Share of associates loss, net of tax, is excluded due to lack of control.

With headquarters in Toronto, ON, and offices in both B.C. and around the globe, Namaste Technologies is a leading online platform for cannabis products, accessories, and responsible education.

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