Namaste Technologies Inc (CVE:N, OTCQB:NXTTF) co-founder and CEO Sean Dollinger fired right back at Andrew Left's Citron Research after the notorious short-seller called the cannabis e-commerce platform's shares a "joke" in a report Friday generated by his Citron Research.
“Tell [Left] he can come and hang out with me on the weekend, travel around the world," Dollinger told Proactive Investors' Christine Corrado in an exclusive phone interview. "Tell him it’s a formal invite from me. Have him videotape everything we’re doing on site, we’ll prove to him that he’s the joke.”
Vancouver-based Namaste recently revealed plans to uplist to the Nasdaq in the hopes of reaching a larger audience of retail and institutional investors, but Left was deeply skeptical about the move.
"Some cannabis stocks are overvalued, and some are total jokes," tweeted Left, putting Namaste Technologies in the "joke" category. He advised investors to get out quick, saying it will not be able to list.
Namaste $N Canada. Some cannabis stocks are overvalued, and some are total jokes. This is a joke Drop it like its hot' after the pledge party prohibits listing in US, downside: 80%. That .50— Citron Research (@CitronResearch) September 14, 2018
Citron forecast the stock to fall more than 80% from its current price to US$0.25.
Shares of Namaste in Canada closed on Friday 7.8% down at C$2.84, having dropped during the session as much as 17.2% to the day's low of C$2.55 on the news.
US-listed shares on the OTC markets fell 8.4% to finish at US$2.16, likewise tumbling almost 17.4% to a session low of US$1.95.
"This is a C$1bn company that does not grow cannabis, rather they sell vape pens and have a website that did a paltry C$46k in revenue last quarter as they lost C$9mln," wrote Citron Research analysts. "This is the type of euphoria, hype and promotion that the SEC has been warning investors about."
Citron said the last few weeks have been strong for Cannabis stocks that trade in the US and "investors have gone feverishly wild" in creating bubble-like valuations.
"While you can’t blame real companies like Aphria and Canntrust on hoping to join the party through a NASDAQ listing, you have to expect some party crashers to show up," the analysts wrote.
Not just blowing smoke
A team of MIT engineers and Wall Street analysts called Trefis, however, put a $7 price target on Namaste Technologies saying the company aims to become the “Amazon of Cannabis” in the coming years.
"We currently have a price estimate of $7 per share for Namaste Technologies, which is higher than its market price," wrote the Trefis Team in Forbes on Friday. "The company’s websites have over 600,000 monthly visits with a database of approximately 1.5 million users."
Trefis analysts wrote the company has "a strong presence" in the UK, Canada, and Germany and holds "a large chunk" of the online cannabis markets in Europe and Australia.
"With the growing demand for medical cannabis products, the company is catering to the emerging markets such as Brazil, Mexico, and Chile through a number of new supply channels," the analysts added.
READ: Namaste Technologies builds UK medical cannabis footprint with acquisition of pharma distributor AF Trading
Left's criticism comes at a time when Namaste Technologies has been particularly busy making smart acquisitions and forging tie-ups to grow its global footprint. The company announced Thursday that its wholly owned subsidiary, Namaste Bahamas, will acquire UK-based AF Trading Ltd, which operates as Access Fulfillment, for C$5mln.
No capital-raise will be required as Access Fulfillment will receive half the payment in cash and the rest in Namaste stock. In exchange, Access Fulfillment will operate as Namaste's distribution center for CBD, or cannabidiol, a compound found in the hemp or cannabis plant that helps with sleep and anxiety, and cannabis products in the United Kingdom.
Access Fulfillment operates a 30,000 square-foot distribution facility in the UK and holds a license to distribute pharmaceutical products. The British acquisition will help Namaste develop its medical cannabis distribution platform in the UK.
READ: Namaste Technologies inks deal with BlueSky Biologicals to distribute CBD products in the UK and Europe
Namaste Technologies has inked a deal with BlueSky Biologicals Inc to distribute their hemp-derived cannabidiol products in the United Kingdom and Europe.
The company also operates an online platform that markets cannabis-related products like vaporizers and smoking accessories in 20 countries and via 30 websites. It also maintains a database of more than 1.5 million customers and has acquired Findify.io and NamasteMD, Canada's first fully integrated patient consultation portal available in the Apple and Google Play stores.
Citron not high on pot stocks
Left's research vehicle, Citron, has aggressively taken aim at Canadian cannabis stocks, which had been on a tear before a pullback in the past 24 hours on a story appearing in Politico claiming marijuana investors and workers risked a lifetime border ban entering the US. Dollinger called those reports "nonsense."
Last week, Citron released a note declaring Canadian cannabis grower Tilray Inc shares (NASDAQ:TLRY) too expensive, tweeting that retail investors have “gone mad.” That was just weeks after making a bullish call on Tilray.
Contact Uttara Choudhury at [email protected]
Follow her on Twitter: @UttaraProactive
-- Updates with additional details and background information. Christine Corrado and Rene Pastor contributed to this report. --