SEATTLE, WA / ACCESSWIRE / June 16, 2015 / The cannabis industry is often compared to the Wild West when it comes to investing, since many companies are newly minted and thinly traded. In fact, the SEC warned investors back in May 2014 saying that marijuana-related companies may be at risk of federal prosecution, while FINRA noted that many companies operating in the space were the subject of investor-fraud complaints or amounted to little more than pump-and-dump schemes.
While accredited investors have access to funds designed to diversify those risks through private equity and grouped public investments, individual investors have fewer options when looking for low-risk opportunities within the burgeoning industry.
In this article, we'll take a look at MassRoots Inc. (OTC: MSRT) and its focus on the underserved cannabis advertising market, which has both limited risk and high reward.
Low-Risk, High-Reward Opportunity
MassRoots is a leading cannabis-centric social media network with over 375,000 users that's taking the same monetization approach as social media bellwethers like Twitter Inc. (NASDAQ: TWTR) or Facebook Inc. (NASDAQ: FB). After raising money through the ArcView Group in 2013, the company went public through an S-1 Registration Statement rather than a reverse merger to become a fully reporting U.S.-listed cannabis stock.
Since it's not involved with the production of cannabis in any way, the company has less regulatory risk than many other companies in the space focused on physically growing the substance, producing concentrates, or operating retail dispensaries. The company also faces fewer regulatory hurdles than pharmaceutical stocks trying to obtain U.S. FDA approval for cannabinoid-based medications, which can takes years and millions of dollars.
The company's low-risk business model also has high-reward potential. Since dispensaries have few ways to reach potential customers through existing media channels, they have increasingly turned toward social media platforms like MassRoots to drive high-value leads. The firm's agreement with Flowhub - a seed-to-sale system for growers and dispensaries - means that these marketing efforts can be fully integrated with inventory systems, too.
If the video below does not display correctly, please view an interview with MassRoots CEO Isaac Dietrich by following this link: https://vimeo.com/129131096.
CannabisFN CEO Interview | Isaac Dietrich / CEO of MassRoots, Inc. (OTC: MSRT) from TDM Financial on Vimeo.
Alternative to Growtech & Consulting
MassRoots provides an alternative to other low-risk opportunities within the burgeoning cannabis industry, including growtech companies and consulting firms.
Growtech companies, like Surna Inc. (OTC: SRNA) and Heliospectra AB (OTC: HLSPY), benefit from the growth in the cannabis industry without touching the substance itself by focusing on growing equipment. Similarly, consulting firms, like American Cannabis Company Inc. (OTC: AMMJ), aim to avoid any regulatory problems by simply advising cannabis companies rather than participating directly in the business.
MassRoots provides a compelling alternative to these types of companies with its high-margin technology business model that doesn't have high capital costs. Social media networks also have a built-in barrier to entry as an increasing number of consumers make social connections with each other, creating a brand loyalty since all of their connections are using the same platform. And finally, the stock is value-priced compared to many of its public and private peers, including WeedMaps and Leafly, when looking at implied valuations.
Looking Ahead
The cannabis industry is often compared to the Wild West, but savvy individual investors are finding opportunities in areas that don't face high regulatory risks. In these areas, MassRoots provides a compelling opportunity given its high-margin business model that mirrors successful social media companies. Investors may also appreciate the stock's modest valuation compared to its private peers, as well as many publicly traded companies in the space.
For more information, visit the company's website at http://investors.massroots.com and its investor presentation or the CannabisFN profile.
Legal Disclaimer:
Except for the historical information presented herein, matters discussed in this article contain forward-looking statements that are subject to certain risks and uncertainties that could cause actual results to differ materially from any future results, performance or achievements expressed or implied by such statements. Emerging Growth LLC dba TDM Financial, which owns CannabisFN, is not registered with any financial or securities regulatory authority, and does not provide nor claims to provide investment advice or recommendations to readers of this release. Emerging Growth LLC dba TDM Financial, which owns CannabisFN, may from time to time have a position in the securities mentioned herein and may increase or decrease such positions without notice. For making specific investment decisions, readers should seek their own advice. Emerging Growth LLC dba TDM Financial, which owns CannabisFN, may be compensated for its services in the form of cash-based compensation or equity securities in the companies it writes about, or a combination of the two. For full disclosure please visit: http://www.cannabisfn.com/legal-disclaimer/.
SOURCE: Cannabis Financial Network
