Namaste Technologies Inc. (N.CN) (NXTTF) has been a leader in the vaporizer and accessories space, and is otherwise focused on capitalizing on Canada’s burgeoning legal marijuana industry.

In late August, CannMart received confirmation from Health Canada that it has reached the review stage during which Health Canada will complete a thorough review of the application. In 2014, CannMart submitted its application to Health Canada to become a sales only licensed medical cannabis producer.

Namaste plans to leverage its strength in e-commerce and logistics with CannMart’s license to work toward becoming a leading Canadian medical cannabis retailer. Since CannMart applied for an ACMPR sales only license, it will be able to purchase wholesale medical cannabis from other licensed producers and sell to individual patients in accordance with the ACMPR.

Secures Best-in-Class Partners to Capitalize on Strategic Initiatives

We are favorable on the partnerships that Namaste has developed over the last few months and believe that these relationships position the company to succeed.

A few weeks after CannMart heard back from Health Canada, Namaste announced a major milestone when it signed a product acquisition agreement with Aphria Inc. (APH.TO) (APHQF). Under the agreement, Aphria will supply medical cannabis through Namaste’s Cannmart facility in Ontario, Canada.

The agreement is a major development for Namaste as it is in-line with the management team’s execution strategy, which is to migrate medical cannabis consumers to a licensed producer. We are favorable on the relationship with Aphria since it is one of the largest and best capitalized licensed medical marijuana producers in Canada. Aphria is also focused on increasing its market share in Canada, particularly given the TSX’s comments regarding the U.S. marijuana market.

One week after Namaste and Aphria signed an agreement, the company signed an exclusive hardware supply agreement with Aurora Cannabis (ACB.TO) (ACBFF) for the Canadian market. Pursuant to the agreement, Aurora will offer a specially curated selection of industry-leading vaporizers which will be sourced from Namaste.

Namaste will establish a direct inventory feed to both Aurora’s online shop and its mobile app, providing Aurora customers with access to a range of medical grade vaporizers and other innovative products that are supplied through its platform.

Focused on a Multi-Billion-Dollar Market Opportunity

The global legal marijuana industry is already a multi-billion-dollar market, and Namaste intends to be a significant entity within the industry.

The company has already gained significant market share in the ancillary hardware segment. Through CannMart and the strategic partnerships with companies such as Aphria, we expect Namaste to capture a portion of the marijuana sales market.

The legal cannabis industry has seen incredible growth and Namaste will be able to capitalize on this opportunity through its database of cannabis consumers, its strategic partnerships, and its existing infrastructure.

Continues to Record Strong Revenue Growth

Namaste continues to produce strong revenue during a typically slow period for e-commerce sales and we believe this success has gone un-noticed. Through implementation of new site platforms and machine learning algorithms, Namaste is focused on increasing organically driven revenue and expects to see significant revenue growth as it enters the busiest season of the year for e-commerce.

In late September, the company issued an operational update and reported almost $1.2 million in revenue during the month. When compared to the same month last year, total revenue increased by more than 130%.

We have been impressed by Namaste’s revenue numbers and will keep an eye on how this number as well as the breakdown (which division generates the revenue) changes as the company’s story continues to advance.

An Execution Story

Although Namaste has significantly advanced its fundamental story, the shares are down more than 20% so far this year. Over the last year, Namaste has secured several strategic partnerships and remains focused on expanding its product offering, on making accretive acquisitions and strategic partnerships, and entering new cannabis markets across the globe.

We are favorable on these factors as well as the improving revenue numbers, the strategic partners and relationships, the recent feedback from Health Canada regarding CannMart, and the extensive database of cannabis consumers and businesses.

Namaste continues to execute and deliver strong numbers to shareholders. We are favorable on this execution and continue to view Namaste as an undervalued opportunity and one that investors need to watch.