(This story has been revised to correct the revenue figures for the three months ended in Sept. 30, 2018, and the year-earlier period.)
Marijuana technology firm MassRoots – which has been struggling financially – said it agreed to acquire COWA Science, a cannabis-focused logistics and supply chain firm, in a stock deal valued at $5.8 million.
MassRoots CEO Isaac Dietrich said in a news release the company “is confident” the acquisition “will increase overall revenues and expand our market presence, with the goal of generating positive cash-flows from operations.”
MassRoots, which trades as MSRT in the over-the-counter market, has been hit by falling sales.
In its latest quarterly financial filing, MassRoots said it generated just $4,014 in revenue for the three months ending Sept. 30, 2018, down from $11,516 a year earlier.
At the same time, the company reported a net loss of $4.5 million, narrowing from $7.1 million the previous year.
Last June, MassRoots pivoted and offered a new dispensary business portal for a subscription fee in an attempt to generate more revenue.
Here’s what you need to know about MassRoots’ planned acquisition of Colorado-based COWA Science:
- COWA provides products and services for cultivators, distributors and other ancillary companies.
- MassRoots hopes the deal will allow both companies to provide clients with advertising services, cultivation-related products, consumer packaging, product development and other marijuana-related products and services.
- The agreement is dependent on COWA achieving annual revenue milestones of $2.5 million and $7.5 million.
MassRoots relocated to Los Angeles from Denver last August. COWA is based in Longmont, Colorado.