MassRoots, Inc. one of the leading technology platforms for the regulated cannabis industry, announced today that MassRoots has entered into a definitive agreement (the “Agreement”) to acquire COWA Science Corporation, a supply-chain as a service company, for common-stock consideration valued at approximately $5.78 million, and dependent on COWA Science achieving annual revenue milestones of $2.5 million and $7.5 million. The closing of the Agreement is subject to the satisfaction of customary closing conditions, including the completion of audited financial statements of COWA Science. In the event the Agreement has not been closed by May 15, 2019, MassRoots may terminate the Agreement by providing written notice to COWA Science.
COWA Science provides a wide array of products and services required for cultivators, distributors and other ancillary companies, to run their businesses in the highly-regulated legal cannabis market.
During the 2018 fiscal year, COWA generated revenues of approximately $1.5 million (unaudited) from approximately 50 cannabis and hemp-focused clients. MassRoots anticipates that the acquisition will enable both business segments to expand their client-bases by offering customers a complete suite of cannabis-centric products and services, including:
- Advertising services, including listings on MassRoots’ dispensary finder and WeedPass Rewards Program;
- Growing supplements and nutrients, including white-labeled supplements and growing materials;
- Consumer packaging compliant with industry-specific regulations;
- Process and product development;
- HVAC resources tailored to the unique needs of regulated cannabis businesses; and
- Miscellaneous office and cleaning supplies, lab equipment, and bulk chemicals.
“MassRoots’ management team has been observing COWA Science and their growth trajectory for several years and are impressed with the book of business they have built with minimal outside capital investment,” stated Mr. Isaac Dietrich, MassRoots’ Chief Executive Officer. “This acquisition will be immediately accretive and allow us to better diversify ourselves in the rapidly emerging cannabis industry. Going forward, MassRoots is confident that the addition of COWA Science will increase overall revenues and expand our market presence, with the goal of generating positive cash-flows from operations.”
“COWA is thrilled to be joining the MassRoots family. I believe that our expansive service offerings and strategic industry relationships will provide transformative synergies to both MassRoots and its shareholders,” said Mr. Christopher Alameddin, COWA Science’s Chief Executive Officer.