MassRoots Inc (OTCMKTS:MSRT) shares ran up just shy of 80% between December 29, 2017, and January 3, 2018. The run comes on the back of a development that hit press on December 29, outlining the company’s decision to form a wholly-owned subsidiary and to – in turn – use the subsidiary to integrate its primary operations with what could be a game-changing technology.
What did we learn and why is it important for MassRoots?
Before getting into the latest news, it’s worth quickly touching on what this company does and where it stands in its space.
MassRoots operates a technology platform for the medical cannabis community in the United States that enables users to share their cannabis content, follow various dispensaries, and stay connected with the legalization movement. The company also operates a mobile application that enables consumers to make educated cannabis purchasing decisions through community-driven reviews.
Think of it as a sort of educational and news content social network through which medical cannabis users can (and do) interact from all corners of the country.
The company also operates a point-of-sale system, called MassRoots Retail, which enables cannabis-related businesses to streamline their retail operations and manage compliance reporting to state regulators. Compliance is a major issue (and a major stumbling block, in many cases) in this industry and with MassRoots Retail, MassRoots is attempting to reduce the complexity of this side of the medical cannabis space, both for retailers and consumers.
So that is the introduction out of the way, why is the company running right now?
Well, MassRoots just announced that it’s forming a subsidiary called MassRoots Blockchain Technologies, Inc. and that the subsidiary will be dedicated to developing blockchain-based solutions for the cannabis industry.
Blockchain is a bit of a buzzword in the equities markets right now but of all the companies that have sought to integrate this sort of technology into their operational activity, the advantages for MassRoots are perhaps the clearest.
Looking specifically at the company’s point-of-sale system, MassRoots can employ blockchain technology to create an incredible amount of transparency from a seed to sale perspective for pretty much any type of transaction along the distribution and supply chain for cannabis products. In the same vein, smart contracts, which are contracts that complete without the input of a third party, can be employed to automatically order fresh stock of a particular product in a medical marijuana retailer’s portfolio if and when the point-of-sale system registers that stock is depleting.
From a compliance perspective, seed to sale transparency is a major advantage. From the retailer’s perspective, employing smart contracts to carry out automatable tasks is far more efficient than employing a human to carry out the same tasks.
Looking outside of the point-of-sale system, however, there are also numerous advantages for the parent company and its shareholders to integrating blockchain technology with its operations. Blockchain technology, for example, can be used to automate and validate the outcomes of elections in a completely transparent way, which could revolutionize the way a company like MassRoots conducts proxy voting.
Additionally, and looking specifically at the MassRoots network, the company collects a large (and very valuable) amount of data from its users – both on the retail and the consumer side of the equation. The ability to store this data on a blockchain will ensure a far higher degree of security for the company and its users (which, in the cannabis industry, more than many others, is a serious issue) as well as make it much easier to target certain pockets of individualized data within the company’s dataset.
This should, in turn, allow the company to improve the quality of targeting that the MassRoots can offer its advertisers (which are a major source of revenue) on the platform and, in turn, allow the company to command higher revenues based on the increased quality of its offering
Exactly when the blockchain technology integration will complete remains to be seen but the advantages of executing on this development are clear.
As a near-term catalyst, then, we’re looking out for any development on this front. We know that MassRoots will be at the North American Bitcoin Conference and the Crypto Funding Summit mid to late January, so there’s a strong chance we’ll see some fresh news hit press towards the tail end of this month.