Cannabis social media platform MassRoots announced on Wednesday that it will acquire CannaRegs, a technology company that tracks changes in cannabis regulations and taxation at the municipal, state, and federal levels. MassRoots bought the company for a reported $12 million in stock.
In a previous statement made to Leafly in late May, MassRoots CEO Isaac Dietrich said his company has been making significant investments to the company’s technical infrastructures to improve the value of the Denver-based company’s public stock, which is traded on over-the-counter markets.
“We raised $4.4 million through equity warrant exercises during the first quarter, fully repaid our long-term debt, and ended the quarter with more than $5.6 in assets,” Dietrich said. “MassRoots has been making significant investments to our technical infrastructures that we expect to create substantial shareholder value.”
CannaRegs, also based in Denver, was founded in 2014 by Amanda Ostrowitz, a former Federal Reserve regulator. According to a MassRoots press release, it’s a debt-free, positive-cash-flow company and is one of the few cannabis tech companies with majority-female leadership.
Earlier this year, MassRoots acquired a point-of-sale service, Odava, as well as a consumer loyalty platform, Whaxy, according to Business Insider. The company also raised $950,000 in August and $1.2 million in July, according to New Cannabis Ventures.
The MassRoots acquisitions come as the company works to shore up financial losses. In May, Marijuana Business Daily reported that the company needed $5 million to stay afloat. According to its quarterly financial filings, the company had posted quarterly revenue of $134,721—and a net loss of nearly $7.5 million.
In filing documents, the company said at the time that it expected to raise the majority of those funds through warrant exercises. During the quarter that ended on March 31, the company added, “we received approximately $4,443,000 proceeds from the exercise of our previously issued warrants.”
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