A reportedly racy shareholder pledge party hosted by Namaste Technologies last week has cost the Toronto firm its business ties with fast-growing cannabis producer Tilray.
Officials with Tilray confirmed in an email to Marijuana Business Daily that it had “ended its relationship” with Namaste following a highly publicized “pledge party” the firm held for stockholders who promised not to sell company shares for 90 days.
Earlier in the month, the two firms signed a purchase agreement under which Namaste would buy bulk cannabis from Tilray to sell on its subsidiary CannMart’s e-commerce platform.
According a report by Canada’s La Presse, women dressed in “sexy” nurse uniforms enrolled patients into the company’s telemedicine portal with a pledge for consultation and cannabis recommendation through email.
Laws in Quebec ban telemedicine for medical cannabis. Health Canada is investigating the company’s practices, according La Presse.
Officials with Health Canada could not be immediately reached for comment.
“We were not aware of and did not approve Namaste’s recent promotional activities,” Chrissy Roebuck, a spokesowman for Tilray wrote in an email to MJBizDaily.
“We do not believe these types of activities will further legitimize medical cannabis with the medical community.”
Namaste called the La Presse story “misleading” in a release issued late last week.
“Furthermore, it is with disappointment that Tilray chose to terminate the agreement, as Namaste was not in breach of any terms of the agreement,” Namaste’s CEO Sean Dollinger said in the announcement.
The fallout with Tilray underscores the growing scrutiny placed on cannabis companies, said Mitch Baruchowitz, managing partner with Merida Capital Partners.
“There are a lot of places for investors to put their money, and operators have to understand they are under intense scrutiny,” Baruchowitz said. “It’s cool to be the guy that does things differently, but you don’t want to be the guy that does it at the cost of losing (massive) market cap.
“People still want to be graded on a curve because this is a hot industry, but I think that the period of investors ignoring critical shortcomings is coming to an end.”
Namaste, sells vaporizers and smoking accessories through more than 30 websites in 20-plus countries, including Canada, Britain, Australia and Brazil. The company, which trades on the over-the-counter market under the ticker NXTTF, has been called by some as the ‘Amazon of cannabis.”
The company hopes to uplist to the Nasdaq.
Tilray trades on the Nasdaq under the ticker TLRY.
Lisa Bernard-Kuhn can be reached at [email protected]aily.com
Credit:Source link