Technology stock Namaste Technologies (NXTTF)(CVE:N) is a leading online cannabis retailer and is one of the many pot stocks that have witnessed a surge in its stock price over the last one year in the anticipation of the revolutionary move. The company, which currently sells only vaporizers and other accessories for consumption of medical cannabis, plans to enter the recreational cannabis space through its partnerships with various Licensed Producers (LPs) in Canada and abroad. However, some of the key provinces in Canada have recently chosen Shopify as their partner to facilitate online and in-store sales of recreational cannabis.
While technology stock Shopify is likely to capture a large portion of the online cannabis market, cutting-edge technology and artificial intelligence-driven platform, coupled with a strong network of suppliers and a wide range of curated products, offered by Namaste could enable it to hold an upper hand and maintain its leadership position in the online cannabis space in Canada and across the globe.
Is Shopify A Threat For Namaste?
Shopify (SHOP) conducts business as a software-as-a-service (SaaS) e-commerce platform and connects retailers with suppliers and end-consumers. Its technology is capable of analyzing consumer buying habits that can enable retailers to alter their product offering or marketing strategy to maximize their profits. Over the last few years, the company has been used as a preferred channel for online sale by various organizations, both start-ups and more established ones, indicating the strength of the company’s platform. As a result, its stock has quadrupled since the beginning of 2017 and has surged over 60% since the beginning of the year.
Having shown its mettle in the fashion and cosmetic industry, Shopify is now growing in the cannabis market in Canada. The software company has been chosen to sell recreational cannabis by British Columbia and Ontario – two of the key provinces in Canada that are likely to witness a surge in demand for recreational cannabis after its legalization next month. Additionally, the company has also tied up with large LPs, such as Canopy Growth Corp., Aurora Cannabis, and The Green Organic Dutchman, to retail their cannabis produce on its website. These LPs are likely to be credited for roughly 40% of the cannabis that will be produced in Canada in the near term. Given that the potential worth of the Canadian recreational cannabis market is expected to be in the range of $5-$10 billion in the coming year, these deals will allow Shopify to build itself up as a middleman in the cannabis industry and capture a sizeable portion of this space.
