MassRoots Inc (OTCMKTS:MSRT) recently made a longer-term lower low. But the stock has responded well to that adversity in recent days, popping about 30% higher. The move was helped along by news that the company announced that CannaRegs, Inc. has secured multiple government contracts in California. If you recall, we recently reported that MassRoots had entered into definitive agreements to acquire CannaRegs, Inc., so this is something that speaks to the MSRT bottom line.
“We are extremely pleased to announce these new contracts, which significantly expand our operations throughout the rapidly-emerging California marketplace,” stated Mrs. Amanda Ostrowitz, Co-founder of CannaRegs. “These agreements allow us to enhance our market presence within California’s $5 billion legal cannabis industry and we expect to generate significant revenues as we execute on these contracts. Going forward, we expect to leverage these new government relationships and our best-in-class technology to capture additional market share and significantly increase revenues.”
MassRoots Inc (OTCMKTS:MSRT) 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.
MSRT 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 1M registered users.
According to company materials, “MassRoots is one of the largest technology platforms for the regulated cannabis industry. The company’s mobile apps enable 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 discussed above, MSRT was looking for some kind of catalyst to help it heal recent sharp weakness. Its latest announcement could be that catalyst. Now, as we have always found, again and again, that the devil truly is in the details, and this latest press release is a bit short on details. That said, the market is apparently willing to give the company the benefit of the doubt at this point.
According to the release, and as we know all too well, California passed Proposition 64 allowing for the full legalization of marijuana last November. Management takes time to point out that the implementation of this new law entails a lot of red tape and “significant regulatory issues”. Oversight relating to water usage, licensing, background checks and safety and education training are just some of the rules in which retailers will need to familiarize themselves. That opens the door for a major market opportunity for CannaRegs, which provides users with up-to-date access to all cannabis-related rules and regulations from municipal, county, state and federal sources.
“These contracts provide strong validation that our planned acquisition of CannaRegs is both timely and valuable,” said Mr. Isaac Dietrich, CEO of MassRoots Inc. “California’s voter-approved Proposition 64, will require new rules and standards for marijuana testing facilities and CannaRegs is positioned to establish itself as a market leader within this developing industry. Management expects CannaRegs to secure similar contracts in the near future.”
The chart shows 34% piled on for shareholders of the name during the trailing week, but this action is running counter to the larger trend in the name. The situation may be worth watching. MSRT has evidenced sudden upward volatility on many prior occasions. What’s more, the name has seen a growing influx of trading interest, with the stock’s recent average trading volume running 70% above its longer-run average levels.
Earning a current market cap value of $44.8M, MSRT has virtually no cash on the books, which stands against virtually no total current liabilities. MSRT is pulling in trailing 12-month revenues of $979K. In addition, the company is seeing major top-line growth, with y/y quarterly revenues growing at 53%. This may be a very interesting story and we will look forward to updating it again soon. Sign-up for continuing coverage on shares of $MSRT stock, as well as other hot stock picks, get our free newsletter today and get our next breakout pick!
Disclosure: we hold no position in $MSRT, either long or short, and we have not been compensated for this article.