Denver based company MassRoots has released its 3rd quarter revenue for the last 3 months and the results are less than favorable. The company, which has more than a million registered users and over 25,000 shareholders, has filed its quarterly report with the Securities and Exchange Commission (SEC) for the quarter ending September 30, 2017 and the report has shown a startling drop in revenue. While this time last year, the company made $209,003 and spent $2,094,211, this year the quarter has ended with $11,516 in revenue, accrued from paid advertising on the platform and costs $7,533,530, that went to paying stock based compensation.
The Need to Refocus
The decrease of $197,487 in revenue comes at a time when the company is undergoing a major transition in leadership. Isaac Dietrich resigned during the last quarter and Scott Kveton has been named as the interim CEO. MassRoots board member Vincent “Tripp” Keber made a statement in the press release issued by the company that indicated that things could shift based on the change in leadership. “The Q3 financial results do not reflect what we believe to be MassRoots’ potential and reaffirms the board’s decision last month to make a leadership change,” explains Keber. “In this regard, we have asked our interim CEO Scott Kveton to refocus efforts with the plans he has put into motion for a direct-to-consumer & B2B play by leveraging our installed base of users and recent acquisitions.”
Earlier this year, the company purchased Whaxy, a fully white labeled ordering software for licensed cannabis businesses for end-to-end transactional automation as well as Odava, a point-of-sale software for licensed dispensaries. MassRoots already offers its members the chance to buy cannabis through the app and read reviews so the best choices can be made. It helps consumers by connecting them to the best purchasing decisions and cannabis businesses by allowing consumers to buy their weed directly through the platform.
“Moving forward we intend to focus our efforts to push the business to cash-flow positive as quickly as possible by maximizing revenue streams from the investments made over the last 3 years and continuing our cost-cutting efforts,” says interim CEO Scott Kveton. “We thank our shareholders for their continued support,” concluded Kveton. “We look forward to sharing some exciting developments and reporting back on our progress over the coming weeks.”
Doubt About MassRoots’ Future
Despite the positivity put forward by board members and Kveton, some are not so confident. According to The Cannabist, officials claim that the company will need to raise 2.5 million by the end of the year in order to stay in business. The company seems hopeful nonetheless with plans in place for getting the business prospering again. With so many states now electing to legalize recreational cannabis, the potential for profit and expansion is increasing exponentially. 20 percent of the country has legalized the plant and 4 of those states, which includes California, are expected to start their retail sales of cannabis in 2018. With this in mind, the company has a lot to gain from the future of cannabis.