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MassRoots Acquires Odava, a Leading Compliance Platform for the Cannabis Industry

Jul 6, 2017 • 12:27 PM EDT
5 MIN READ  •  By Michael Berger
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MassRoots (MSRT) is one of the largest and most active technology platforms for cannabis consumers, businesses and activists. This social network began in April 2013 as an online community for people who smoke cannabis and has involved into so much more.

MassRoots has been focused on executing growth initiatives while laying the ground work for new opportunities to further improve its position in the burgeoning cannabis industry.

Over the last year, MassRoots has benefited from both organic and inorganic growth initiatives. One of the company’s ongoing initiatives has been focused on identifying and entering strategic partnerships with leading cannabis companies so as to expand its platform’s functionality and to accelerate user growth.

Continues to Improve and Expand the Services Offered

Today, MassRoots continues to execute on its ongoing initiatives after it signed a definitive merger agreement with Odava, Inc., a leading regulatory compliance platform for the cannabis industry.

Through this merger, MassRoots will be able to provide regulatory compliance, point-of-sale and consumer engagement programs for the cannabis industry. Odava will become a wholly-owned subsidiary of MassRoots.

Odava provides compliance, point-of-sale, and supply chain management for the cannabis industry. Through its point-of-sale and regulatory compliance system, the company automates and streamlines operations for cannabis businesses. Currently, Odava offers its comprehensive platform to dispensaries and cultivators in Oregon.

MassRoots plans to expand Odava’s reach and enter California, Nevada, Massachusetts, Colorado, Maryland, and Florida in 2017 and 2018 through its current users and relationships.

Once the merger is declared effective, MassRoots will issue 3.25 million common shares to Odava stockholders. MassRoots will also pay $30,000 to Scott Kveton and $5,000 to Steven Osborn in repayment of debt obligations owed by Odava.

Positioned to Capitalize on New Cannabis Markets

The landscape of the United States legal cannabis industry has changed significantly and MassRoots is positioned to capitalize on this through its user base, partnerships and existing relationships.  

In the November election, the legal cannabis movement scored its most significant victory yet as voters in eight states passed cannabis ballot initiatives.

The nature of MassRoots’ business makes its entrance into new markets easy and low cost. The business is not tied to a certain location and does not need a physical presence in any particular state to generate revenue.

As state markets across the country continue to develop, new potential revenue streams are created for companies such as MassRoots.

Poised to Benefit from Strategic Partnerships and Acquisitions

In September, MassRoots partnered with cannabis business intelligence firm Headset to integrate their base-level dashboards into MassRoots’ business platform. The purpose of the partnership is to accelerate the roll-out of live menu prices from every major dispensary point-of-sale system on the market.  

In May 2015, MassRoots invested in Flowhub’s preferred seed round to provide capital for the initial development of the platform. Since launching in June 2016, Flowhub has facilitated more than $200 million in transactions across hundreds of dispensaries in Colorado and Oregon. Through its point-of-sale and regulatory compliance system, Flowhub automates and streamlines business operations for cannabis dispensaries and cultivators.

In January, MassRoots acquired Whaxy, an online order-ahead and menu management platform. Whaxy’s online ordering platform has processed over $5M in volume across more than 40,000 unique transactions. MassRoots believes that the integration of Whaxy’s products and services into its technology platform can accelerate adoption to hundreds of locations.

A Story to Watch as MassRoots Continues to Execute

Although MassRoots has significantly improved its platform as well as the services it provides, the shares are down more than 50% in 2017. We are favorable on the acquisitions and partnerships made over the last year and believe they have de-risked the company’s story.

MassRoots started out as a technology platform focused on helping cannabis businesses advertise given that outlets such as Facebook (FB) and Google (GOOGL) restricted such advertisements. Over the last year, MassRoots has focused on new opportunities where it can leverage its user base and its relationships. We are excited by these new opportunities and continue to monitor their development.

A key factor that supports MassRoots’ entrance into new markets stems from its massive user base and its relationships. We are favorable on today’s development since the combination of the two firms is expected to create one of the largest technology platforms in the cannabis industry.



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Authored By

Michael Berger

Michael Berger is Managing Partner of StoneBridge Partners, LLC and Founder of Prior to entering the cannabis industry, Michael was an Equity Research Analyst at Raymond James Financial covering the Energy Sector. Michael has been featured in publications such as The Street, Bloomberg, US Money News, and hosts various cannabis events across North America.


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