New Frontier Data And MassRoots Join Forces

DISTRICT OF COLUMBIA: New Frontier Data, a leading provider of data, analytics and business intelligence in the cannabis industry, and MassRoots have announced a partnership designed to “elevate digital marketing practices and better understand social consumer behavior at a pivotal time in the cannabis industry.”

“It is an exciting time in the cannabis industry whereby large financial, research, and consumer-focused enterprises are now looking to understand risks and opportunities stemming from this booming industry. MassRoots is the largest social media platform dedicated to cannabis in the world, with incredible engagement from its members, creating a unique opportunity to learn from them and educate brands, investors, and mature markets entering the cannabis arena,” said Giadha Aguirre De Carcer, CEO and founder New Frontier Data.

“This past year at MassRoots we have been focused on taking our amazing cannabis community to the next level with a new leadership team and its vision to take the company beyond the social media platform and this partnership with New Frontier Data should allow us to achieve that. This industry has evolved from a movement into a thriving market that is hungry for data to serve its shareholders and consumers. Only through the data analytics provided by New Frontier Data and our understanding of our community can we believe we can move this emerging market and pioneering platform forward,” said Scott Kveton CEO at MassRoots.

New Frontier Data’s data engine will enable MassRoots to aggregate, analyze and monetize the large volume of consumer engagement data being collected by the MassRoots mobile application and web portal. By combining MassRoots consumer data with New Frontier Data’s Big Data Engine and market leading industry analytics, we will then be able to generate greater insights into the 3 million users in the MassRoots eco-system and establish correlations between their interests and interactions across multiple channels. This collaboration is expected to will create broader applications allowing for far more sophisticated and targeted digital advertising, as well as more advanced consumer engagement.

A Letter From MassRoots Chairman About Merger With Odava

NEW YORK: MassRoots, one of the leading technology platforms for the cannabis industry, has released the following update from its Chairman and CEO Isaac Dietrich concerning its planned merger with Odava.


Dear MassRoots Shareholders,

Last week, MassRoots entered into an agreement and plan of merger with Odava, Inc., a leading compliance and point-of-sale system for cannabis-related businesses. The closing of the merger is subject to various closing conditions as we have detailed in our Current Report on Form 8-K filing, dated July 5, 2017. Upon effectiveness of the merger, MassRoots can offer clients a complete set of solutions to operate their business: advertising to cannabis consumers, reporting to state regulatory systems, and streamlined management of their supply chain. This acquisition, along with other recent developments, further solidifies MassRoots as one of the leading technology companies in the regulated cannabis industry, which ArcView Market Research projects to grow from $6 billion to $22 billion over the next five years.

Our main focus is expanding market share in states where Odava is able to report to state regulators via Franwell, Inc.’s METRC system, currently OregonAlaska, and Colorado. Just a few days ago, it was announced that California will be utilizing METRC, enabling us to enter the largest regulated cannabis market in the U.S. with minimal integration modifications. With more than 1,000 dispensaries expected to be subject to California state regulations for the first time, this presents a unique growth opportunity for MassRoots to on-board these dispensaries to the Odava system as well as our other offerings.

Our main engineering priority is integrating MassRoots’ community of over a million cannabis consumers with Odava, enabling consumers to view pricing and inventory data in real-time, identifying the best strains and products through community-driven reviews, and empowering dispensaries to implement customer loyalty and deal programs to boost retention. We believe the seamless integration of our systems will give us a unique value proposition to dispensaries by consolidating the most important functionality and data collection in one central platform.

Four years ago, I invested my life savings to start MassRoots and since then, purchased stock on two occasions at $0.50per share, to take advantage of three core opportunities in the cannabis marketplace:

  • Patients and consumers need an app to find the best products and, as state and App Store regulations permit, order cannabis directly from their smart phones;
  • Cannabis-related businesses are in need of result-driven advertising and customer loyalty systems to boost sales. An online community of over a million of the world’s most passionate cannabis consumers is their target audience; and
  • Dispensaries need reliable software to streamline their operations and manage their compliance reporting to state regulators in an efficient manner.

We believe MassRoots is uniquely positioned to solve these problems. First, we estimate our market-share of cannabis consumers on our mobile applications is among the top three in the country and the MassRoots brand is one of the most recognized in the industry. Second, we have a top-tier engineering team, made up of some of the world’s top technologists that enables us to build better products and move faster than anyone else in the space. Third, MassRoots has one of the largest data sets in the cannabis space, giving us knowledge on the sector very few people have – and giving us the necessary insight to build products that drive immediate value for dispensaries. Lastly, with over 25,000 shareholders, $17 million raised to date through equity financings and warrant exercises, and no long-term debt on our balance sheet, we believe we have access to the capital necessary to rapidly grow our platform.

In late 2016, we began leveraging MassRoots’ stock as a strategic currency, allowing us to acquire Whaxy and, now, Odava, which extends our platform’s reach into retail dispensaries. We are currently evaluating several other synergistic and technology-focused opportunities that we expect would expand MassRoots’ revenue channels and cross-selling opportunities.

As is the case with many companies operating in a dynamic environment, MassRoots’ execution has not been perfect – we spent too much money advertising to consumers, over-expanded the size of our staff and overhead, and did not effectively listen to our clients to better solve their needs. The Odava integration plan has given our leadership team an opportunity to re-evaluate our strategy and the following changes have gone into effect:

  • We have significantly reduced our advertising budget and staff devoted to marketing and community-outreach. MassRoots already has one of the largest user bases in the industry and going forward, we expect our brand growth to be primarily-driven by dispensaries on-boarding their customers as part of a consumer loyalty program.
  • In an effort to expedite the development of MassRoots’ new business portal for dispensaries, we retained one of the most reputable development firms in Silicon Valley to supplement our in-house development team. With the work on this portal nearly complete, we decided not to renew this contract, under which we have paid approximately $100,000 per month since the beginning of 2017. It is important to note that we have not capitalized any of the over $5 million MassRoots has spent on development-related salaries and expenses over the past several years; we believe that by immediately expensing these costs rather than spreading them out over time, it will enable us to reach profitability more rapidly.
  • While our current Chief Operating Officer, Daniel Hunt, has been instrumental in helping MassRoots grow to this point, we have both recognized it is time to bring in a more seasoned operator to lead our team on a day-to-day basis. Over the past several weeks, our leadership team and I have interviewed several candidates with the experience necessary to bring MassRoots to the next level. We expect to announce a new Chief Operating Officer in the near-future.

Collectively, the changes we have implemented are expected to reduce MassRoots’ expenses by more than $1.5 millionannually while still enabling us to deliver on our core business objectives. Despite the challenges we have encountered over the past few years, MassRoots has succeeded in establishing one of the most recognizable brands in cannabis with one of the largest market shares of cannabis consumers and extensive sets of data – uniquely positioning our company to dominate the cannabis technology space.

Going forward, the MassRoots team is going to be focused on two core metrics: the number of dispensaries utilizing our platform and the monthly recurring revenue we have contracted with dispensaries. While we utilize a number of other data points to analyze and adjust our strategies, fundamentally, these two metrics best reflect the health of our business. We look forward to regularly updating investors on these metrics and our progress.

With CaliforniaNevada, and several other new markets coming online in the near-future, we are in an incredible position  to leverage our brand’s equity and capabilities to seize this opportunity. We are grateful for your continued trust in our company and look forward to updating you on our progress.

Regards,
Isaac Dietrich
Chairman and Chief Executive Officer
MassRoots, Inc.

MassRoots’ latest corporate overview deck is accessible here.

Apple’s Ban On marijuana Social Networking App Goes Up In Smoke

CALIFORNIA: Apple has lightened up on restrictions that once banned cannabis-focused social networking apps from its App Store.

The tech giant reversed course Thursday night by making MassRoots, a social network for cannabis lovers, available on the iOS App Store a little over three months after banning the site’s app. MassRoots first became available through the App Store in 2013, but Apple decided to pull the app last month due to conflicts with company guidelines banning “apps that encourage excessive consumption of alcohol or illegal substances.”

To avoid running afoul of that App Store rule, MassRoots agreed to add a geo-restricting function that only makes the app available in the 23 states that have legalized medical marijuana, the social network said Friday in a blog post. That tweak apparently swayed Apple, as the app was once again available for download from the App Store as of Friday. (MacRumors noted last night that it was possible to bypass the geo-restrictions by signing up for a MassRoots account through the company’s website before logging into the app, though MassRoots founder Isaac Dietrich later said his site was working to close that loophole by Friday.)