MassRoots Enhances its Platform with a Major Acquisition…

From strategic partnerships to new management members, 2016 has been a banner year for MassRoots and yesterday the social network announced another significant development.

After the market closed, MassRoots announced that it has entered into a definitive agreement to acquire DDDigtal Inc., which does business as Whaxy and Cannabuild, for $100,000 and 2,926,830 shares of common stock.

Once the acquisition is completed, MassRoots will be able to offer a full suite of dispensary software solutions (online ordering, marketing and real-time inventory management) to cannabis businesses.

MassRoots CEO Isaac Dietrich said that its main focus over the next few months will be to increase the number of dispensaries that utilize the MassRoots /Whaxy platform.

A Rapidly Growing Footprint

Since launching in May 2016, Whaxy’s menu management and online ordering platform for licensed cannabis businesses has processed over $5 million with of business through 40,000 unique transactions.

Whaxy’s platform seamlessly integrates with nearly every major point-of-sale system used by dispensaries and will seamlessly connect to the MassRoots network, allowing for live pricing, online ordering and product feedback.

Over the last six months, Whaxy has been used by some of the leading businesses in the industry, including Harborside, GreenHouse, Cresco Labs and others.

Created Strategic Partnerships and Improved its Platform

Earlier this month, MassRoots announced that MJ Freeway’s API will power live menu pricing for its dispensary clients within the MassRoots platform. MJ Freeway is one of the leading point-of-sale and compliance management platforms focused on the cannabis industry.

This partnership will enable seamless communications between MJ Freeway’s thousands of dispensary clients and MassRoots’ community of cannabis consumers.

In October, MassRoots announced the first international partnerships between cannabis companies when it reported that it partnered with Aphria Inc. (APH), a licensed medical cannabis producer in Canada.

Under the agreement, MassRoots will help build awareness of the Aphria brand amongst its Canadian user base and Aphria will compensate MassRoots with a cash fee for each patient it refers. Aphria also invested $250,000 in MassRoots by purchasing 500,000 shares and the company received 500,000 warrants to buy shares at $0.90.

In September, MassRoots entered a strategic partnership with Headset, Inc., a leading business intelligence platform for cannabis-related businesses. The purpose of the partnership is to expand the functionality and utility of the companies’ respective platforms, and integrate Headset’s base level dashboards into MassRoots for Business. This partnership will significantly accelerate the rollout of live menu prices from every major dispensary point-of-sale system on the market, as well as offer dispensaries access to meaningful data in easy-to-use, actionable formats. The company expects to rapidly scale over the next several quarters.

MassRoots’ Investment Hits Inflection Point

In May 2015, MassRoots invested in Flowhub for the initial development of its cannabis point-of-sale and compliance technology. The company executed a subscription agreement to acquire 494,118 Class A Preferred Shares of Flowhub for $175,000.

Under the agreement, MassRoots acquired approximately 7.95% of the then outstanding shares of Flowhub and 35% of the then outstanding Class A Shares. Since launching in June 2016, Flowhub has facilitated more than 250,000 transactions across dozens of dispensaries in Colorado and Oregon, facilitating end-to-end regulatory compliance while streamlining their business operations.

MassRoots believes that Flowhub is at a critical inflection point that is poised to scale from dozens of dispensary locations using its platform to hundreds of locations by the end of the year. Within the next few months, MassRoots expects to see a significant percentage of all transactions occurring in the regulated cannabis industry to happen within the MassRoots/Flowhub ecosystem.

Outlook is Bright

MassRoots is one of the largest and most active technology platforms for cannabis consumers, businesses and activists. This social network formed in April of 2013 as an online community for people who smoke cannabis but it has since evolved into much more.

With cannabis legalization continuing to open new markets and MassRoots improving its service through new features and new developers, we expect to see the company continue to execute.

We continue to remain favorable on MassRoots and view the company as an attractive ancillary investment opportunity. The company is led by a management team that has been able to find strategic partnerships that we expect to deliver value to shareholders.

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Michael Berger is Managing Partner of StoneBridge Partners, LLC and Founder of Technical420.com. 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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