MassRoots Inc (OTCMKTS:MSRT) has been on a downtrend ever since its Nasdaq listing dreams were crushed back in May. The company was hoping to become to first cannabis-related name to up-list from OTC. The Nasdaq determined that MassRoots may be deemed as “aiding and abetting” the distribution of an illegal substance under Federal law and that they were unwilling to proceed with MassRoots’ listing application. Now shares just hit fresh 52 week lows and shareholders are looking for a rebound.
MassRoots is one of the largest and most active technology platforms for cannabis consumers, businesses and activists with over 900,000 registered users. The company is affiliated with the leading organizations in the cannabis industry, including the ArcView Group and National Cannabis Industry Association. MassRoots has been covered by Fox Business, CNBC, Fortune, Denver Post, and The Financial Times.
MassRoots generated $492,000 in revenue during the second quarter of 2016, more than all previous quarters combined. This took its cumulative year-end total to $585,000, of which approximately $325,000 was generated from MassRoots’ core product of digital advertising. MassRoots sees more eyeballs than nearly any other cannabis Web site or app. The problem has been its products have lacked the core functionality to connect users with the dispensaries and products through which they’re looking. MassRoots is hoping that its dispensary finder is a solid first step in fixing this deficiency.
Through its iOS and Andriod apps, MassRoots’ dispensary finder aims to connect its users with the best dispensaries and products in their local area. Improvements to MassRoots’ business portal are being engineered concurrently with new in-app features. By the end of August, dispensaries will be able to edit their hours, listing information and other key details within MassRoots’ online portal. MassRoots says that it is committed to scaling its revenue through automation and technology rather than additional staff and overhead.
So far, over 100 dispensary locations have signed a one year listing contract for MassRoots’ dispensary finder, including some of the leading cannabis industry brands. Listing on MassRoots’ dispensary finder will provide businesses with greater visibility and awareness among cannabis consumers. Dispensaries that registered for MassRoots’ dispensary finder before August 1, 2016 were able to lock-in $42 per month per location pricing for one year. CEO Isaac Dietrich said:
“We could not be more excited for the launch of our dispensary finder, the first of many services we plan to offer to the over 5,000 regulated dispensaries in the United States. Over the coming weeks, we anticipate getting hundreds of dispensaries listed on MassRoots’ map while we introduce further technological solutions to drive sales and streamline their operations.”
MassRoots believe the 2016 elections have the potential to significantly increase the size and scope of the regulated cannabis industry. According to the Marijuana Policy Project, campaigns in Maine, Nevada, Arizona, California, Michigan and Florida are expected to succeed in placing initiatives on their states’ ballots for this year’s election. A 2016 ArcView Market Research Report projects the regulated cannabis industry could grow to $10 billion by 2018 as a result of this year’s elections.
MassRoots’ business model is designed to benefit from this trend. When a new state passes a medical or recreational cannabis law, MassRoots is able to start registering users and businesses in that state with minimal marginal cost. Because MassRoots is not involved in the production or sale of cannabis, the company does not have to build or grow operations, open retail stores, or have a significant physical presence in the state in order to generate revenue. At the same time, MassRoots’ financial model is not tied to the success of a particular location or brand making MassRoots a play on the industry as a whole.
Currently trading with a market cap of $25 million, MSRT reported $51k in cash, $439k in total assets, and $1.899m in total liabilities. MassRoots will need to raise additional money going forward and that will result in more dilution. The best bet for the company is Green Rush 2.0 pushing pot stocks higher on the back of victories at the November ballot box. We will be updating our subscribers as soon as we know more. For the latest updates on MSRT, sign up below!
Disclosure: We have no position in MSRT and have not been compensated for this article.