Just as investors have settled down from the Aphria debacle, it seems that a new scandal is ripping apart another Canadian cannabis company. Namaste Technologies Inc (TSXV: N), which is currently worth around $400 million, announced today they had fired their CEO, Sean Dollinger, after an internal investigation triggered by a short seller report revealed that the chief executive had committed securities fraud.
Dollinger was terminated for “breaches of fiduciary duty” and “evidence of self-dealing” concerning the sale of Namaste’s subsidiary Dolliger Enterprises. The company will also be commencing legal action against their former CEO for various damages connected to the insider dealings. In his place, Namaste appointed Meni Morim, former chief product officer and artificial intelligence director to serve as interim CEO.
“Namaste remains in a strong financial position, with cash balances intact, and will continue to execute on its unique and effective business strategy. The Company will provide an update regarding the outcome of the strategic review process once it has concluded,” said the company said in an official statement. Namaste added that they were considering selling the company in light of the announcement and were seeking an investment bank to help them in the process.
The report was produced by known short-seller Andrew Left of Citron Research, which accused Namaste subsidiary Dollinger of deceiving investors regarding U.S. assets as well as selling to company insiders for a marked-up price. Left also accused Dollinger of further lying to investors concerning a listing on the NASDAQ when such a listing never took place.
“Rarely in its history has Citron seen a fraud so blatant: for context, we honestly view Sean Dollinger as a walking securities violation. If Namaste was a US traded company it would be halted and Dollinger would probably face criminal charges,” said Citron Research according to their report, which is readily available online. “Namaste has lied to its shareholders, Canadian Regulators, US Regulators; and most of all has attempted to hide US assets from the Justice Department in an attempt to obtain a US listing.”
In response to the news, Namaste’s stock prices dropped around 15 percent, plunging from C$1.4 per share to as low as C$1.1, before settling at around C$1.18. Citron Research has an exceedingly strong track record of exposing security fraud, a fact that has still stands as the internal review concluded with the short sellers’ assessment.
Namaste Technologies Company Profile
Namaste Technologies powers the ultimate online customer experience for medicinal cannabis and related products. Beginning with NamasteMD.com, the Company’s integrated telemedicine application, we connect medical clients with health care practitioners to more readily issue and renew cannabis prescriptions online. Featuring the first Canadian Medical Sales-Only Licence, the Company’s own Cannmart.com is your ‘everything cannabis store’ offering clients a large variety of strains to fill their prescription needs.
Namaste’s unique artificial intelligence (AI) engine incorporated in its platforms and related Uppy App, completes our ecosystem by identifying the right product and pairing to address specific medical cannabis requirements. Namaste also provides vaporizers and accessories across several platforms operating in more than 20 countries. Namaste’s global technology addresses local needs in a burgeoning cannabis industry requiring smart solutions. – Namaste Technologies