The driver? One only has to look at the items on the ballots in several states in November of 2016 to see major cultural and scientific trends are driving growth of the industry. Marijuana was on the ballot for one reason or another in nine states for 2016’s general elections, and most of those measures were approved by voters. Marijuana is now legal for at least one reason in more than half the states in the United States.

It’s not just a consumer-driven movement though. State governments are also increasingly in support of the idea. States that have legalized marijuana are seeing major windfalls in related taxes. Case in point? The $70 million that Colorado took in during the 2014-15 fiscal year, which is nearly twice the tax revenue the state earned in alcohol taxes. Colorado is also expected to generate$135 million in cannabis taxes and licenses fees in fiscal year 2015-16.

The growth trend looks the same from the other direction too.  In 2010, Harvard University professor Jeffrey Miron opined “If it legalized drugs, the United States could save $85 billion to $90 billion per year. Roughly half that is spent on the current drugs policy and half that is lost in taxes that the state could have levied on legal drugs.”

Those are all a microcosm and indication of public opinion. As of the latest survey, one in eight U.S. adults says they use marijuana, and 58% of the United States’ adult populous says they believe marijuana should be legalized on a nationwide basis. Some of those adults – an increasing number of those adults – are politicians that can make it happen.

It all bodes well for the industry, and bodes particularly well for organizations that help facilitate usage of marijuana, regardless of the reason.

Namaste Technologies in Focus

Namaste Technologies’ goal is to continue on in its position as the leading e-Commerce supplier of vaporizers and accessories to the medical and recreational consumer of cannabis.

Namaste has recently gone through a series of dynamic changes, growing organically as well as through acquisitions. The end result of all that work is a large-scale operation that not only sells cannabis/marijuana vaporizers, but also sells related accessories in addition to the manufacture and sale of its own vaporizer. Indeed, with more than 30 e-commerce retail stores in 20 countries (with monthly traffic of over 550,000 visitors) targeting both medical and recreational herb consumers, Namaste Technologies currently offers the largest range of brand name vaporizer products in the market, and is the leading on-line supplier of pens, bongs and pipes to the medicinal and recreational consumer of cannabis.

Namaste’s current family of companies/websites includes Namaste Vapes (namastevapes.com), URT1 (everyonedoesit.com), VaporSeller (vaporseller.com), Grizzly (grizzlyoriginals.com) and GreenVapes (greenvapes.co.uk). The company also operates VASTrader, (www.VASTrader.com), a marketplace for the trading of previously owned vaporizers, and launched the Groovy Vapes application, available in the Google Play and Apple stores, for the purchasing of vaporizers.

The end result of this activity is the creation of a profitable company that’s driving annualized revenue of $10 million, but isn’t done growing yet.

Its management team has considerable expertise in e-commerce, international logistics and fulfillment, engineering and design, and corporate finance. Its supported by a highly experience board of directors with decades of legal, financial and public markets expertise. The company’s also got a clean capital structure with no debt and 60 million shares outstanding. Namaste Technologies also boasts considerable insider ownership with insiders controlling ~60% of issued and outstanding shares

Namaste is currently manufacturing and commercializing a unique and proprietary product, the Guru. Guru seamless vaporizes dry-herbs, concentrates and liquids in a single portable unit. Landed cost per unit is US$60 and sales price is US$195. The initial industry feedback and reviews have been excellent.

To fully appreciate Namaste, though, one must explore its recent acquisitions, as the combination of two key companies are the key to why the organization is where it is today.

URT1

In September, Namaste Technologies Inc. reported that it has entered into an agreement with URT1 Limited and its wholly owned US subsidiaries to create the world’s largest e-commerce company focused on sales of vaporizers and accessories. This acquisition, in combination with the previous acquisition of VaporSeller, reiterates Namaste’s strategic position as the leading consolidator of the industry.

Founded in 2000, URT1 Limited is one of the longest standing and best known online retailers of vaporizers, pipes and accessories in the UK. The company operates two websites, www.everyonedoesit.com and www.everyonedoesit.co.uk, and retails through select third-party marketplaces, and carries over 2,500 products, including the latest vaporizers, pens, water pipes and an extensive line of accessories, which is one of the largest product selections available in the industry. Its unaudited 12 month trailing revenues were approximately C$3.2 million for the period ended August 31, 2016 with a gross profit margin of 53%.

URT1 is also one of the top 5 domains (websites) in the world for the sale of vaporizers, pipes and accessories.

The strategic rationale for the deal also serves as a bullish thesis. That is, the acquisition positions Namaste as the largest business to consumer e-commerce retailer of vaporizers and accessories globally, with combined pro-forma unaudited 12 month trailing revenues of approximately C$10 million for the period ended August 31, 2016, and total monthly site traffic of over 550,000 visitors. The combined company will operate 26 websites in 20 countries with distribution centers in North America, South America, Europe and Asia Pacific.

The combined company will also have over 3,000 products for sale from 200 different vendors… the largest product offering of any company in the industry. The complementary product offerings of both companies creates significant revenue expansion potential through cross selling across all sites.

Moreover, Namaste will utilize its proven search engine optimization strategies to enhance site traffic, conversions and average selling prices of URT1.

Retail Partners

In October Namaste Technologies Inc. announced two new agreements with industry leading manufacturers, PAX Labs (“PAX”) and Firefly Vapor (“Firefly”). The agreements with PAX and Firefly approve Namaste to sell their products in North America and over 20 countries internationally. Namaste is the only company in the world to receive international rights from these companies.

PAX and Firefly are two of the most innovative manufacturers of portable vaporizers and carry two of the most sought after products on the market. As the Company prepares for the holiday season (the most productive period of the year for vaporizer and accessory sales) these expanded relationships position Namaste for what is anticipated to be considerable e-commerce traffic and sales generation.

Provided to a limited number of companies in the industry, these contracts were awarded based on Namaste’s leading position in the e-commerce market segment with the anticipated closing of the URT1 acquisition soon, bolstered by existing international exposure, a strong logistics networks, and high customer service standards.

E-Commerce Success

Namaste is getting good sales traction with its older acquisitions too. In August the company reported that its website traffic  grew 531% between April and July, before the URT1 deal materialized. The company attributes this growth to the recent acquisition of VaporSeller along with enhanced digital marketing strategies.

The company has invested significant resources into improving the domain authority index of its flagship UK websites. As a result, domain authority has increased from 21 to 41, which now places Namaste in the top decile of all vaporizer sales globally, based on this important metric.

Namaste Technologies Outlook & Analysis

The core of the Namaste Technologies story is four pronged. It is proactively doing three tasks on a regular basis:

1. Aggressively pursuing a high growth industry ideal for consolidation. Market estimated to be ~US$2.0 billion and growing at over 30% annually.

2.  Identifying multiple accretive acquisition targets, including the recent acquisition of VaporSeller.

3. Combining an excellent array of management skillsets with our expertise in e-commerce, product development and engineering and corporate finance. We all bring something unique to the team.

The distinguishing factor that makes NXTTF a stand-out within its industry:

4. It’s already producing revenue with a current run rate of ~$10.0 million and implementing organic revenue growth strategies forecasted to increase base e-commerce revenues by 6% monthly (100% annual).

That outline is compelling. The crux of the story here, however, is the way greater scale in conjunction with a growing market is leading Namaste Technologies to surprisingly wide margins at a pace faster than most would have guessed. Its increased profits from enhanced buying power and a reduction in overhead is like to lead to pre-deprecation positive earnings by December of 2016, and the company is projecting to be cash flow positive in 2017.