Namaste Technologies Inc (CVE:N) (OTCMKTS:NXTTF) has said the strategy shift it made in 2019 is starting to pay off as the cannabis-focused online platform posted its highest quarterly revenue figure for two years.
Net revenue for the three months to February 29, 2020, came in at C$5.3 million, which was 16% up on the same period in 2019, the company said.
READ: Namaste says CannMart subsidiary delivers initial purchase order for bulk cannabis distillate to Adastra Labs
The group's core growth engine, e-commerce subsidiary CannMart, saw its revenue lifted by an impressive 798% to C$1.3 million, excluding excise tax, compared to the same period last year.
The group's loss for the quarter was reduced to C$7.4 million compared to a loss of C$10.3 million in 2019, reflecting the restructuring efforts and improvements made, it added.
"Namaste's revenues jumped this quarter to the highest level since the first quarter of 2018 with a significant contribution from CannMart, an impressive feat taking into account some exits from non-core businesses during 2019," noted Meni Morim, Namaste CEO in a statement.
"We are gaining traction in the B2B segment with one early customer, with whom we passed the Proof of Concept stage, driving the majority of CannMart's revenue growth.
"These are initial, yet strong signals of traction, as CannMart generated in this quarter alone, 164% of the revenue generated by CannMart in the entire year of 2019," he added.
Morim said CannMart was seeing "significant growth" in operations as it enters new markets with new and well-known brands and a growing number of distribution channels.
The first quarter saw the subsidiary gain a new supply agreement with Alberta Gaming, Liquor & Cannabis (AGLC), the fifth provincial government customer for Namaste.
"As evidenced by the strategic relationships with brands like IGNITE and Phyto Extractions, we are aligning with major brands to help build their customer base within the legal Canadian cannabis market," said Morim.
"The Cannabis 2.0 market is still in its infancy. However, we expect this market to gain momentum as new and innovative products and brands are introduced."
In May, the group announced that the CannMart subsidiary had delivered an initial purchase order for bulk cannabis distillate to Adastra Labs Holdings Ltd (CSE:XTRX).
Adastra Labs is a British Columbia-based provider of same-site Health Canada licensed cannabis extraction and analytical testing services.
Under the terms, Adastra will supply standard processing services to CannMart Labs for cannabis extract and concentrate products over a period of 12 months
Shares in Namaste added 4.44% to stand at C$0.47 in Toronto.
---Updates for share price---
Contact the author at [email protected]