In the last 75 days major turmoil has occurred across the top of Cannabiz Media’s Point of Sale Leaderboard including a board coup, company sale and an industry exit. The impacted firms, by our estimate, control 50% of the point of sale market.

Back in October 2022 we compiled our 5^thAnnual Point of Sale Report with updated leaderboards. Since then, the cannabis industry has continued to contract with deals terminated and MSOs shutting stores and exiting markets. We have also seen events in the software space as companies have tried to adjust:

1. Dutchie - Boardroom coup ousted two founders
2. Akerna - Assets sold to Posabit and 365 Cannabis. $4M price tag is about $500K for each percentage of market share*
3. BioTrack – Sold yet again, this time to Alleaves. $30M price tag is $2.2million for each percentage of market share*

*State Seed to Sale contracts certainly influenced the prices paid.

Here’s the count and estimated market share from our 2022 report:

We found Akerna’s acquirer Posabit in 56 stores in our report so the combined company will move up in future leaderboards, even with the divestiture of 365Cannabis.

Cannabiz Media has also been tracking Point ofSale Switching for the last three years. The graph below is cumulative for 2020 to 2022. BioTrack has given up way more seats than it has gained – same for MJ Freeway/Akerna. Dutchie is net positive.

Below we show the impact of those moves on the counts in the industry:

Akerna

Akerna had tucked in a number of acquisitions over the years including Cannabis 365, Viridian Sciences, Trellis and others(see below). This conglomerate spun apart as a result of the recent acquisition by Posabit for $4 million. This is equivalent to $500K for each point of market share, state seed-to-sale contracts aside.

This moves Posabit higher up on the Corporate leaderboard as we can add these stores to Posabit. 365 was sold back to the original management team and Akerna received a cash payment of $500,000 and the parties agreed to terminate an earn-out payment due and payable to the principals of 365 Holdco LLC with a deemed value of $2,283,806. We showed them at 22 stores or .05% share.

BioTrack

Perhaps the third time is the charm for BioTrack? They were acquired by Colorado-based Helix TCS in June 2018. Then Forian and Helix merged in March 2021. Less than two years later they are now part of Alleaves. Purchase price is$30 million. State seed to sale contracts aside, this works out to $2.24million for each point of market share.

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Dutchie

Dutchie made big news when they purchased two leading point of sale vendors in 2021. The combination of Green Bits and Leaflogix catapulted them to the top of the industry. Unlike Akerna that had engaged in small tuck-in acquisitions, Dutchie went big and is considered the proverbial 800 pound gorilla by some. Based on our switching behavior data, they appear to be winning share from other vendors by offering a complete solution.

Conclusion

As we have been saying since our first Point of Sale Report in 2018 – this industry is ripe for consolidation. Akerna was one of the first to buy up other providers and now they have succumbed as well. Dutchie bought two of the biggest in 2021 and now Alleaves is paired with BioTrack. Last Fall we found 79 POS providers in the US with 53 in Canada and 15 serving both markets. Some of these companies are very small and are going to have a hard time surviving this industry consolidation. Stay tuned as we expect more of these deals to happen in 2023.  

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Author

Ed Keating is a co-founder of Cannabiz Media and oversees the company’s data research and government relations efforts. He has spent his career working with and advising information companies in the compliance space. Ed has managed product, marketing, and sales while overseeing complex multi-jurisdictional product lines in the securities, corporate, UCC, safety, environmental, and human resource markets.  

At Cannabiz Media, Ed enjoys the challenge of working with regulators across the globe as he and his team gather corporate, financial, and license information to track the people, products, and businesses in the cannabis economy.  

Ed graduated from Hamilton College and received his MBA from the Kellogg School at Northwestern University.

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