Cannabis firm Tilray cuts ties with Namaste Technologies following pledge party

(This story has been updated to include information provided by Health Canada confirming it is investigating the situation surrounding Namaste’s recent shareholder pledge party.)

A reportedly racy shareholder party hosted by Namaste Technologies has cost the Toronto company its business ties with fast-growing cannabis producer Tilray.

Officials with Tilray confirmed in an email to Marijuana Business Daily that it had “ended its relationship” with Namaste after a highly publicized “pledge party” the firm held for stockholders who promised not to sell company shares for 90 days.

Earlier in the month, the two firms signed a purchase agreement under which Namaste would buy bulk cannabis from Tilray to sell on its subsidiary CannMart’s e-commerce platform.

According to a report by Canada’s La Presse, women dressed in “sexy” nurse uniforms enrolled patients in the company’s telemedicine portal with a pledge for consultation and cannabis recommendation via email.

Laws in Quebec ban telemedicine for medical cannabis.

Health Canada is “aware of the event that took place in Montreal and is in the process of following up with the parent company and the licensed producer,” André Gagnon, a spokesman for Health Canada, wrote in an email to  MJBizDaily.

“Until the new prohibitions on promotion come into force on October 17, 2018, the advertising of cannabis remains subject to several prohibitions in both the Narcotic Control Regulations (NCR) – made under the Controlled Drugs and Substances Act and the Food and Drugs Act,” Gagnon wrote.

“If a person or a corporation is suspected to be in contravention of federal advertising prohibitions, Health Canada would investigate and take appropriate compliance and enforcement action, if necessary.”

Tilray spokeswoman Chrissy Roebuck said the firm was “not aware of and did not approve Namaste’s recent promotional activities. We do not believe these types of activities will further legitimize medical cannabis with the medical community.”

A Namaste release called the La Presse story “misleading.”

“Furthermore, it is with disappointment that Tilray chose to terminate the agreement, as Namaste was not in breach of any terms of the agreement,” Namaste’s CEO Sean Dollinger said in the announcement.

The fallout with Tilray underscores the growing scrutiny placed on cannabis companies, said Mitch Baruchowitz, managing partner with Merida Capital Partners.

“There are a lot of places for investors to put their money, and operators have to understand they are under intense scrutiny,” Baruchowitz said. “It’s cool to be the guy that does things differently, but you don’t want to be the guy that does it at the cost of losing (massive) market cap.

“People still want to be graded on a curve because this is a hot industry, but I think that the period of investors ignoring critical shortcomings is coming to an end.”

Namaste sells vaporizers and smoking accessories through more than 30 websites in 20-plus countries, including Canada, Britain, Australia and Brazil. The company – which has been called the “Amazon of cannabis” by some – trades on the over-the-counter markets under the ticker symbol NXTTF.

The company hopes to uplist to the Nasdaq.

Tilray trades on the Nasdaq as TLRY.

Lisa Bernard-Kuhn can be reached at [email protected]

11 comments on “Cannabis firm Tilray cuts ties with Namaste Technologies following pledge party
  1. Brandon Hunter on

    Hey Lisa,

    I find your article very speculative at best. When you say reportedly, it’s like saying. I did not journalistic research and I’m going to say this based on someone else’s journalistic research which has been proven to be false. The spokes models were not conducting any telemedicine. They were nearly showing Namaste technologies app.

    Good luck with being a hack writer.

    Reply
    • Josh Reid on

      Enough with the fake news already. Please take down this post or edit it accordingly. You collectivley damage People’s lives when you spread misleading information for personal gain. Enough.

      Reply
  2. Larry Johnson on

    I would be amazed if you have not received 100+ hate emails from the brainwashed Namaste fanatics that are devoid of any critical thought and objectivity. Good for you to present the two facts that are relevant:

    1. Health Canada is looking into their operations.
    2. Tilray has decided they do not want to be associated with them.

    Anecdotal evidence suggests they coach stoners into what to say to their telemedicine physician to obtain an authorization for medical cannabis. They bring unnecessary scrutiny to a valid industry and set back attempts to destigmatize those who truly need medical cannabis for therapeutic means are not looking for a high from THC.

    Reply
    • Bradley Goodman on

      Larry,

      Good of you to state your hypocrisy in such a succinct manner. You congratulate the author on reporting facts and then state anecdotal evidence.

      ‘Brainwashed Namaste fanatics’ stinks of projection to me.

      Anecdotal evidence suggests you work for a rival company and are engaged in bad mouthing the competition to line your own pockets. And I met a man in a bar that says you’re still beating your wife every night. That’s where anecdotal evidence gets us.

      Brad

      Reply
  3. Sage on

    Self-righteous elitism is the curse of bloated valuations and even the smallest pricks can pop the bubble — my money is on Namaste, not unTilray

    Reply
  4. Irie Selkirk on

    Namaste has women dressed up as nurses?! And anyone is defending this company??
    Shame on Namaste. This is medical cannabis. Not a frat party. Disgusted to see this in the nascent cannabis industry.

    Reply
  5. GITWIN on

    If you can’t help them you might as well profit off them – Buying at the right time is the skill you want to master! anyone can sell high – no pun intended!

    Reply
  6. Bobby Byrne on

    Judging by reading the comments section, a lot of people have a negative opinion of Namaste and I don’t understand why?

    The negative comments keep referring to the medical cannabis industry as if it’s some orphaned child that needs protecting. Too many snowflakes who have designated themselves as medical cannabis’s unwanted guardians.

    Catch a grip, as an outsider I can only see the benefits of a company trying to normalise the stigma surrounding cannabis and making it more accessible to the average joe.

    Step away from the keyboards for five minutes and address your own issues for a change.

    Reply
  7. Maxcatski on

    Kudos to Tilray for making every effort to comply with Health Canada regulations. If I was a shareholder in this multi-billion company, that’s what I would want to see.

    However, I sold all my pot stocks today so I am no longer a shareholder. Too frothy, I think. But maybe that’s the cannabis talking.

    Reply

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