The cannabis social media network MassRoots Inc. announced Friday its about to have more money coming in than going out after laying off 14 workers and missing a $966,384 debt payment last month.
MassRoots raised $4.5 million from investors who bought shares in the company, according to a filing made Wednesday with the U.S. Securities and Exchange Commission.
MassRoots' founder and CEO Isaac Dietrich still owns the largest share of the company and led the recent funding round. Other investors included former MyPoints.com CEO Steve Markowitz, Aphria, The Delavaco Group and several family offices, according to a news release.
"Management believes that these funds are sufficient for the company to reach cash-flow positive and to scale our commercialization efforts to a much wider audience," Dietrich said in the release.
Dietrich and other investors are betting that "the current political climate coupled with increasing demand in regulated cannabis markets presents a tremendous growth opportunity for MassRoots."
Nine heavily-populated states will be voting on regulating the sale of cannabis for medicinal or recreational use in November. MassRoots expects the measures that pass will help boost its revenue and growth and annual revenue will grow to $15 million to $25 million within the next 12 to 18 months.
The Denver-based company is competing with Weedmaps and Leafly to be the premier social platform for dispensaries, cannabis users and activists. It reports having more than 900,000 users.
The recent equity offering has given MassRoots its largest cash on hand in its three-year corporate history. In February, the company tried to raise $2 million from investors but ultimately decided in March to take out $1.4 million in promissory notes to fund operations. It was a payment on that debt that the company missed last month, according to a filing.
Business & data reporter Adrian D. Garcia can be reached via email at [email protected] or twitter.com/adriandgarcia.
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