Back in the day, I took great delight in pounding the absolute fucking shit out of a company called Namaste Technologies. I was not alone.
There were many reasons for this, chiefly among them that the CEO of that company, a manbun that had somehow become sentient, spent days of his every work week making what appeared to be akin to hostage videos. promising cool thing after cool thing, everything from nightclub nurse parties for shareholders on down.
While he accrued a weird Elon Musk-like proto-nerd following that kept the shareprice up for a time, eventually the whole thing disintegrated like a pyramid scheme when folks who understand numbers began looking under the hood and found.. well we never really got to the bottom of what they found, but it was bad.
The man-bun would move on, though not without weird internal legal beefing between him and the board, who accused said hair mess of all kinds of legally questionable stuff, before allowing him to not so quietly move on with cash in pocket and something not far from an apology, because who needs another lawsuit when you’re patting out the flames of regulatory inquiry?
Left behind was a guy whose company had been acquired by the preceeding hirsute mess, and who, if he was going to come out of all this with reputation intact, would have to be the last man standing in what would be a long effort to not only stop a quickly sinking ship from sinking, but to then turn it around and eventually sail it to ports of plenty.
Lifeist Wellness (LFST.V the new branding for Namaste) has, in the years since, to the shock of many and most certainly me.. continued to exist.
This is down to two things, neither of which I would have put money on back in 2019.
First, default CEO Meni Morem stuck around and did the hardest of hard work, finding money to float a shipwreck, writing off debts with shares and vlotting endless corporate blood loss, while a lot of long term bagholders took every chance they could to pound his reputation to dust;
Second, the company… made revenues?
Not a lot of revenues, and certainly not enough to cover the vig on what problems the earlier video production house CEO/nurse party nightclub entrepreneur left behind. But some.
A $21.9 million loss in 2021 was reduced to $13.7 million in 2022. That reduction continues today.
But so too does actual business.
While times were good, Namaste was a billion-dollar-plus company by market cap. That’s *probably* why those who were supposed to be supervising management were so shocked to find managment was playing fast and loose when they actually bothered to take a look. Everybody feels confident when the market cap has 10-digits, because if there are troubles you can usually buy your way out of them.
But when the death spiral kicks in, it’s everybody else’s fault.
One man whose fault none of it was, was Meni Morem, a technology entrepreneur who sold his company to a public company and might have expected better out of the deal. But when the dust settled, and he found the company that bought him was on life support, and nobody else wanted to run it, Morem stepped in for several years of triage. Legal battles. Money problems. And that’s before you even factor in those years were where cannabis companies couldn’t raise a dollar.
Much to my surprise, when I looked to see what had happened to Lifeist Wellness over the past few years, I learned it hadn’t died.
The stock wasn’t over $4 anymore, but it wasn’t zero either.
The market cap wasn’t $1 billion + anymore, but it wasn’t zero either.
And, though it still has an oar in the cannabis river, it isn’t on life support like so many others in that business.
I only know any of this because I saw this news, released this week:
Lifeist Wellness Inc. has completed its acquisition of 1000501971 Ontario Inc. (Zest) in an all-stock deal worth approximately $3.4 million, marking a strategic move to strengthen its position in the cannabis industry after years of deep in the trenches survival warfare. This acquisition is, if we’re being fair about it, decent, and indicates a robust comeback, marking the company’s intent to reclaim its position among the players in the wellness and cannabis markets.
Highlights of the deal:
- The acquisition brings an extensive array of exceptional cannabis products, including Liquid Diamond and other hydrocarbon-focused vapes, infused prerolls, and flowers under CannMart, Lifeist’s wholesale distribution business for recreational cannabis within Canada.
- High-margin Zest products, along with Roilty and other superior quality brands, will expand Lifeist’s product portfolio, driving profitability and facilitating diverse health and wellness experiences for consumers.
- By enhancing CannMart’s current product line of cannabis concentrates with Zest’s hydrocarbon vape, infused prerolls, and flower SKUs, Lifeist and CannMart’s competitive stance in the cannabis industry is significantly bolstered.
Lifeist purchased all issued and outstanding shares of Zest from Zest Cannabis Inc and the acquisition was facilitated by issuing a total of 68,234,158 common shares of Lifeist, valued at $3.4 million, at a premium to the market. The seller shareholders will enter into a support and voting agreement regarding the consideration shares, which will terminate automatically two years after the closing of the acquisition.
About Zest and Lifeist, from their PR teams:
- Launched in September 2022, Zest quickly demonstrated remarkable growth, currently offering nine SKUs of vape, prerolls, and flower products available in Alberta, Ontario, Saskatchewan, Manitoba, and the territories. Lifeist’s subsidiary, CannMart, aims to accelerate Zest’s market share growth in the ten provinces and two territories it serves.
- Lifeist Wellness Inc., at the forefront of the post-pandemic wellness revolution, leverages technological and scientific advancements to build transformative wellness companies. The portfolio includes CannMart, facilitating recreational cannabis sales to Canadian provincial government control boards, and Australian Vapes, one of Australia’s largest online retailers of vaporizers and accessories, among others.
CEO of CannMart, Daniel Stern, and CEO of Lifeist, Meni Morim, have both expressed confidence in the potential of Zest’s exceptional cannabis products to propel the growth of their companies. They say the acquisition is a testament to Lifeist’s commitment to broadening its product portfolio and enhancing profitability. It also indicates their readiness to respond to the evolving needs of today’s consumers while maintaining their trajectory in the wellness and cannabis industries.
I’m not sure Zest is actually worth the price paid for it but also I’m not sure that an all-stock deal isn’t some kind of black arts wizardry in the cannabis space these days, especially when your stock is at $0.03. If it adds $500k to LFST’s EBITDA annually, it’ll be helpful and worth the bother.
Let’s bring it back to me, Namaste’s one-time fiercest critic: This deal may move the needle a little in the battle to get Lifeist to break even, but it’s not yet a gamechanger. What it is, is a BIG NOTE OF CONFIDENCE that Zest trusts in Lifeist’s stock enough to be anchored to it for a while. If Lifeist doesn’t survive, neither does Zest, yet they took the deal.
There aren’t a lot of cannabis companies, from those up on high bleeding billions in writedowns, to the little guys slowly growing into profitability. We like Avant Brands (AVNT) and BC Bud Corp (BCBC.C) as examples of that latter group.
But Lifeist isn’t so far off as to be written off, with this acquisition and other elements I’m led to believe they’re working on. They’re in the neutraceutical space with Mikra (makers of Rescue and Cellf), and they run the Australian equivalent of the OG pre-public company Namaste website, selling vapes online.
I guess, from my side of things, and understanding that punching down is the easiest direction to punch, Lifeist isn’t… terrible.
Is it great? No, not yet, but credit to Morem for not bailing alot earlier when it would have been easier to do so than to stick around bailing water for three years.
And to those folks that still stare their one-time Namaste stock in the face every morning, with the big -98% next to it.. I dunno, man. I mean, you’re not going to see Morem take the stock 98x and get your money back, but if he can get that $0.03 stock to $0.06, and maybe $0.09, and maybe narrow that gap closer to break even or even, dare I say, profitability.. what then? What do you say to a guy who didn’t jump on the last lifeboat and start something new while shareholders wondered what happened. What if Meni actually watches enough bodies float by him that this thing becomes a success?
Credit to him for still being in there swinging.
— Chris Parry
The post Hey, did you guys know Lifeist Wellness (LFST.V), the old Namaste… is still alive? appeared first on Equity.Guru.
