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MassRoots To Acquire Cannabis Compliance Tech Company

August 24, 2017

 (Image Credit - Nick Youngson

Over the past few months, MassRoots (OTC:MSRT) has been in the process of transitioning towards providing more and more business and dispensary facing services. Earlier this summer, MassRoots acquired Odava, a compliance and point-of-sale system for cannabis-related businesses. Odava also has a partnership with Franwell, the developer of the METRC seed-to-sale tracking software that enables businesses located in states that use METRC to directly report to state regulators using the Odava platform. 

 

Related: MassRoots' July Investor Deck and Shareholders' Letter

 

As a natural extension of the Odava platform and related services, yesterday evening, MassRoots announced that the company has entered into an agreement to acquire cannabis compliance technology company, CannaRegs for approximately $12 million in stock. 

 

CannaRegs was founded in 2014 by a team including former Federal Reserve Bank examiner, Amanda Ostrowitz. The company provides real-time tracking of changes in cannabis related rules and regulations (including taxation, zoning and more) across local, state and other jurisdictions in California and Colorado. CannaRegs is cash flow positive, and has more than $450,000 in contractually obligated revenue. Beyond this, due to the nature of their business model, it’s not easy for clients to leave given the challenges and expenses associated with keeping track of this information without CannaRegs.

 

Additionally, CannaRegs fits very well into the Odava platform and MassRoots' other compliance related offerings. For example, the company already has to keep track of changes in taxes for their point of sale system, and CannaRegs has the potential to make this process considerably simpler, both for MassRoots and for their clients. 

 

The market seems to really like this acquisition thus far, shares of MassRoots are gaining more than 12% in early trading Thursday. So far today, volume is already more than double the company's 30-day average volume. Even with today's gains, shares of MassRoots are down more than 50% year-to-date. We'll be watching to see if this push into the compliance space can help MassRoots shares in the longer run. 

 

Conclusion

 

For more information on MassRoots, be sure to check out the company's profile in our Marijuana Stock Database. For more OTC-listed cannabis companies, be sure to check out our OTC Marijuana Stock Database. Be sure to subscribe to one or more of our free newsletters so you never miss a marijuana stock or industry update. Also, don't forget to connect with The Daily Marijuana Observer via FacebookTwitterStockTwits and Instagram

 

D/M/O

 

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