MassRoots Inc (OTCMKTS:MSRT) is a penny play in the cannabis space on the technology side that has been performing extremely well of late on several key catalysts. The latest important breaking development is the company’s announcement that it has entered into a definitive agreement to acquire DDDigtal Inc. d.b.a. “Whaxy” & Cannabuild for $100,000 cash and 2,926,830 million shares of MassRoots’ common stock.
According to the recent release, “Since launching in May 2016, Whaxy’s menu management and online ordering platform for licensed cannabis businesses has processed over $5 million in volume across 40,000 unique transactions.” Importantly, this is not DDDigital, a Texas-based game studio. It is DDDigtal (“d-d-Dig-Tall”). Hence, it’s easy to see why it might be doing business as anything else. In this case, the company is generally known as “Whaxy”. We will look at the implications below, which are potentially far-reaching. But first, we need a little context.
MassRoots Inc (OTCMKTS:MSRT) trumpets itself as a company that operates a technology platform for the cannabis community in the United States. The company’s mobile network enables users to share cannabis content to connect with the legalization movement. Its network is accessible as a free mobile application through the iOS App Store and the Google Play marketplace and as a Website at massroots.com.
The company also operates MassRoots.com/shop, an e-commerce platform that allows visitors to order MassRoots Inc T-shirts, jars, and stickers; and MassRoots for Business, a free online portal for dispensaries to schedule posts, view analytics, and gain insights into followers. MassRoots, Inc. was founded in 2013 and is headquartered in Denver, Colorado.
MSRT is one of the largest and most active technology platforms for cannabis consumers, businesses, and activists with over 900,000 registered users.
According to company materials, “MassRoots is one of the largest technology platforms for the regulated cannabis industry. The company’s mobile apps enables consumers to provide community-driven reviews of cannabis strains and products, enabling consumers to make educated cannabis purchasing decisions. MassRoots is proud to be affiliated with the leading businesses and organizations in the cannabis industry, including the ArcView Group and National Cannabis Industry Association.”
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As noted, the key development in play for MSRT right now is the acquisition deal for Whaxy.
“This acquisition, when completed, will expand MassRoots’ offerings to include a full suite of dispensary software solutions – online ordering, marketing, and real-time inventory management— for cannabis businesses,” stated Isaac Dietrich, MassRoots CEO. “Zach Marburger is a brilliant strategist whom we’ve known for years and Whaxy’s CTO Micah Davidson engineered one of the best technology platforms on the market with a lean budget. We could not be more excited to welcome them to the MassRoots team. Over the next few months, our main focus will be increasing the number of dispensaries utilizing the MassRoots/Whaxy platform.”
“We could not be more excited to be joining forces with MassRoots, enabling Whaxy’s system to scale its transaction volume, provide new capabilities to our customers, and add more enterprise value far more rapidly than we would have on our own,” stated Zach Marburger, Whaxy founder and CEO. “MassRoots comes to the table with hundreds of thousands of end-cannabis consumer relationships, hundreds of dispensary clients, a world-class development team, and one of the largest shareholder bases in the industry. The synergies between our two companies are strong and together, we’re building a cannabis technology powerhouse.”
The chart shows 21% piled on for shareholders of the stock during the trailing month. What’s more, the listing has seen an influx in interest of late, with the stock’s recent average trading volume running 34% beyond its prior sustained average level
At this time, carrying a capital value in the market of $60.5M, MassRoots Inc has a decent store ($126.61k) of cash on the books, which is balanced by an appreciable load ($976.7k) of total accumulated debt. That’s not a great balance sheet situation, but top line growth is the cure. MSRT is making real money, with trailing 12-month revenues coming in at 944.6k. In addition, the company is seeing major top line growth, with y/y quarterly revenues growing at 243.1%. The numbers are important, but the curve may well be shifting for this stock to the extent the new assets are effectively integrated into the company’s broader strategic outlook and operations. We will update the story again soon as developments transpire. For continuing coverage on shares of $MSRT stock, as well as our other hot stock picks, sign up for our free newsletter today and get our next hot stock pick!