For the third quarter ended August 31, the company posted consolidated revenue of $3.8 million
() (OTCMKTS:NXTTF), the cannabis e-commerce company, revealed Wednesday that it generated significant revenue from other sources after discontinuing several web properties.
In a statement accompanying the Canadian cannabis e-commerce platform company’s latest numbers, CEO Meni Morim said: "We're seeing the positive effects of rebuilding our revenue stream in our drive to replace discontinued businesses."
"Highlighting this internal shift is how we've successfully increased our end-to-end customer conversion rate on Namaste MD patients to CannMart customers from less than 1% in January to over 6% today. We expect this growth to continue,” he added.
READ: Namaste Technologies names Meni Morim as permanent CEO and board member
The Namaste boss said the company was diversifying its revenue and seeing a great market opportunity both in B2B and B2C.
“As an example, 49% of all Namaste MD patients this year have been prescribed oils, which we can now service with the recent Health Canada license amendment approval,” said Morim.
“Additionally, we have 14,000 patient prescriptions that are pending renewal between now and December 31 and will be receiving a renewal notice shortly. This is a significant increase in our addressable market, and with the work on increasing our conversion rates, we expect to see the positive impact on revenue growth."
For the third quarter ended August 31, the company posted consolidated revenue of $3.8 million, compared with $3.9 million for the same period last year. Significantly, gross margin improved to 26%, compared to 24% in the same period in 2018.
Sufficient working capital
On a positive note, Namaste wrapped up the third quarter with positive working capital of $54.2 million, including $49.1 million in cash and cash equivalents.
"Other areas of our business continue to expand. We continue to build our government revenue channel and expect to make further progress and related announcements during the current quarter,” said Morim, who was named as permanent CEO and board member in August.
The job is not new to Morim, who has been the company's interim CEO since February 4, and its chief product officer since May 2018.
Former CEO Sean Dollinger and head of marketing David Hughes were ousted in February. On February 19, Namaste said that it reached a legal settlement with the former CEO.
One-time costs
For the third quarter ended August 31, the company posted a net loss of $14.7 million, or loss per share of $0.05, compared to a loss of $8.7 million or $0.03 per share in the same period a year ago. The company explained the loss reflected legal fees linked to the class action settlement and an impairment charge to goodwill.
“On the expense side, we have incurred one-time costs, including professional fees related to the class action lawsuit, reflected in our selling, general and administrative expenses,” said Morim.
“As a result of reaching settlements, in principle, we expect to see these professional and related one-time costs to decrease moving forward. We’ve made some tough decisions to improve the company's outlook and expect to make further changes," he added.
During the quarter, Namaste received approval from Health Canada for an amendment to its license allowing CannMart to offer cannabis oil concentrates on its online marketplace. It also signed marketing agreements with CannTx Life Sciences Inc to launch and sell their flagship medical brand, BOWER, under CannMart's consignment sales model.
The Toronto-based company, which has been described as the “Amazon of cannabis,” operates the largest global cannabis e-commerce platform with over 30 websites in more than 20 countries under a variety of brands.
In addition to its product offerings of vaporizers, glassware, accessories and CBD products, the company is also involved in the world of medical cannabis, through its licensed subsidiary CannMart Inc, not to mention its efforts in artificial intelligence, cannabis strain research and a global telemedicine app, as well as sales of medical cannabis from its facility in Toronto.
Contact Uttara Choudhury at [email protected]
Follow her on Twitter: @UttaraProactive