Technology Archives - Green Market Report

Debra BorchardtDebra BorchardtSeptember 23, 2019
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6min4680

The cannabis industry’s first seed-to-sale enterprise resource planning (ERP) software technology company Akerna Corp. (Nasdaq: KERN) (formerly known as MJ Freeway) reported total revenue of approximately $11 million for the year ending June 30, 2019, which was a 4.2% increase over last year’s $10.5.

“Our fiscal 2019 results and recent milestones reflect the continued global adoption of both MJ Platform and Leaf Data Systems by cannabis enterprises and government entities,” stated Akerna Chief Executive Officer Jessica Billingsley. “We are also thrilled to have completed our merger with MTech. This transaction provided us a strong balance sheet and Nasdaq listing, which we expect will accelerate our product development efforts to meet the growing compliance needs of the global cannabis market.”

Revenue Breakdown

With regards to the revenue, Akerna noted that the first year of the Leaf Data Systems contract with Pennsylvania began in fiscal year 2018, returning to lower but stable run rates in the fiscal year ending June 30, 2019. The company said that monthly billings on MJ Platform increased in the month ending June 30, 2018, to the month ending June 30, 2019, by 55%.  Monthly Billings grew from approximately $268,816 in June 2018 to $417,163 in June 2019. The increase can primarily be attributed to growth in commercial software subscriptions to MJ Platform.

“We believe that demand for our MJ Platform software continues to be strong, evidenced by new contract bookings totaling approximately $31 thousand per month on average. This represents the revenue that would be recognized from newly booked clients in a month if they were all currently being billed. A newly booked client in a particular month may include those with actively billed recurring SaaS subscriptions, in addition to those with temporarily suspended subscriptions. An account may be temporarily suspended due to several factors, including:

  1. The client may be awaiting grant of operational license(s) from the state in which the client operates
  2. The client may be awaiting completion of their subscription implementation/setup
  3. Other operational factors which may result in a delay of client operations”

Software revenue in fiscal 2019 was $8.3 million, compared to $8.1 million the prior year. Consulting revenue was $2.4 million, compared to $2.3 million the prior year, driven primarily by the expanding legalized cannabis market.

The company said that its cost of revenue was approximately $4.6 million versus last year’s $4.4 million for an increase of approximately 6%. The statement said that the cost of revenue increased “primarily due to an increase in hosting and infrastructure costs incurred to support our Software business of approximately $0.4 million. Additionally, we incurred higher direct labor costs associated with providing the company’s consulting services of approximately $0.2 million. These increases in cost of revenue were partially offset by fewer third-party subcontractor costs associated with servicing our Leaf Data Systems clients.”

Post Quarter News

Akerna noted the following news events that occurred after the quarter closed.

  • July 2019, expanded further into Europe by serving clients in two additional countries, Italy and Macedonia.  Opened a Medellín, Colombia office to serve our growing footprint in South America.
  • July 2019, a new partnership with Leafly to provide seamless and real-time data updates.
  • August 2019, awarded a new contract from the Utah Department of Health and Department of Agriculture to implement Leaf Data for the state’s new medical cannabis program.
  • August 2019, MJ Freeway named to the Inc. 5000 list of the nation’s fastest-growing private companies.
  • August 2019, Leaf Data and solo sciences partnered to launch solo*TAG™, the world’s first cryptographically-secure, cannabis product authentication system. Exclusively for governments and only available with Leaf Data Systems, our advanced tagging technology combined with a closed-loop platform, significantly improves and strengthens the category of government track-and-trace products.
  • August 2019, announced a strategic partnership to integrate Isolocity’s quality management system (QMS), supporting GMP and ISO 9001 compliance, into MJ Platform.

Looking Ahead

Billingsley added, “Looking ahead, being a public company is expected to afford us liquidity to capitalize on growing market demand and continue our organic growth.  We also intend to opportunistically execute on a targeted, accretive acquisition strategy aimed at building scale and enhancing our growth prospects.”


StaffStaffJuly 25, 2019
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4min9220

Leafwire, the largest cannabis business network worldwide, announced today the closing of a Seed Round for $1 Million. Since its launch, Leafwire has grown rapidly, often with over 1,000 members visiting the platform daily. Leafwire currently boasts more than 16,000 members currently and is projected to surpass 25,000 members by the end of the year. 

Along with their Seed Round announcement, Leafwire has also announced the launch of its new Marketplace feature which will allow for expanded business networking and partnership opportunities for the industry. 

“We built Leafwire to create a safe place where cannabis business professionals can connect, share ideas, find employees and find investors, something that is taken for granted in other industries,” explained CEO Peter Vogel. “ Cannabis is a unique industry and we built Leafwire for that reason; to serve the needs of all cannabis industry professionals.”

The Leafwire Marketplace will act as a robust cannabis business directory with 50+ categories ranging from Legal Services, Payment Processing, Domain Names to Packaging. This cannabis-friendly directory is designed for and based on Leafwire member requests, where everyone can find and connect with the exact cannabis services they’re looking for. 

Leafwire’s Seed Round of $1 Million includes investments from Network Ventures, Silverleaf Venture Partners, KEY Investment Partners, and One East Partners. 

Jordan Youkilis, Founding Partner of KEY Investment Partners, expressed his confidence in the platform, “We became investors in Leafwire, because even in their early stages they have been an invaluable source of deal flow for us. Leafwire has helped to connect us with dozens of dynamic entrepreneurs we wouldn’t have otherwise met. We expect the value provided by Leafwire to continuously increase.”

Speaking on his personal success on Leafwire, Greg Cowan, Investor and Business Consultant at Greenleaf HR, shares, “I was amazed at how quickly networking on Leafwire paid off in a short period of time. Within the first couple of months, I read an article posted by one of my connections that described banking challenges experienced by a CBD manufacturer and retailer. I took a leap of faith and cold-called the person in the article and two weeks later I had an executed Client Services Agreement. Keep in mind, this is a person whom I would have never known about had I not been networking on Leafwire that morning.”

In addition to the Marketplace, they also expect to launch one of the largest cannabis job boards in the industry in the coming weeks. The job board has been the most requested feature by Leafwire members, from both companies looking for employees and job-seekers.

 


StaffStaffJuly 16, 2019
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4min17730

With one of the largest cannabis technology fundraises completed to date,  Jane Technologies, Inc., a retail software company that created the first and largest online cannabis marketplace, has announced it has secured $21 million in Series B funding.

The I “Heart” Jane team is the company behind the first cannabis e-commerce marketplace expands to keep up with global demand for retail cannabis products sold online.

This latest round of funding, led by new and returning investors, will allow Jane to expand its online marketplace to international vendors, bolster its data analytics platform, and deliver data to other industries. The funds will also enable Jane to continue to advance its e-commerce platform of more than 150,000 products with real-time integration into point-of-sale systems.

In October 2018 Jane announced $6 million in Series A funding, which enabled the tech company to grow its technological advances and data analytics while providing consumers an optimized shopping experience. The company is currently in partnership with more than 700 stores across 21 states. 

As the cannabis industry continues to rapidly expand, Jane’s internal data has demonstrated people spend double on online purchases than in-person. Today people who purchase CBD spend 50% more than those who do not. Research also shows the online cannabis shopper will spend an average of $206 a month compared to the offline shopper who spends only $122 a month. 

“We’ve seen Jane effectively support some of the largest retail clients in the country and are pleased to partner with the software innovator so they can grow exponentially,” said lead investor Nick Deans of Pakala Jane Partners. “The online retail marketplace allows Jane to promote local businesses and increase sales with larger shopping cart purchases while keeping transaction costs down.”

Ian Dominguez of Delta Emerald Ventures sees significant value creation opportunity in Jane’s consumer-centric data. “Jane’s purpose-built platform will continue to drive operational improvement for the cannabis industry. In addition, the Jane platform translates across many industries, making Jane as a whole, the future of omnichannel data.”

“Within the rapidly evolving cannabis space, Jane’s insights as the largest facilitator of e-commerce in the industry are invaluable to its partners, particularly for brands seeking to establish and position themselves within an increasingly crowded marketplace,” said Jason Adler, Managing Partner of Gotham Green Partners. “This investment provides resources for building additional infrastructure and proprietary interfaces to help cannabis businesses worldwide to maximize their potential.”  

Jane Technologies Founder & CEO, as well as U.S. veteran, Socrates Rosenfeld stated that “in a world dominated by major multi-national online retailers, we’re bringing together innovative technology to support local businesses, and connecting customers to wellness benefits in their region.”  He also explained that “expanding to global markets is key for Jane as we continue to pioneer the industry and grow an industry-leading team. By helping cannabis companies in the U.S. and overseas, we are localizing the online sales process by bringing together dispensaries, brands and consumers through automation.”


StaffStaffJuly 12, 2019
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8min13482

Jessica Billingsley is a technology pioneer, solutions creator and industry leader, providing proven compliance software solutions to the cannabis market. She is the Chief Executive Officer of Akerna—the first cannabis compliance technology company to be traded on Nasdaq—making her the first CEO from this market space to bring a company to a major U.S. exchange. Jessica is also the CEO of Akerna’s flagship subsidiary—MJ Freeway. She established MJ Freeway in 2010 and it is the leading seed-to-sale regulatory compliance technology provider and developer of the cannabis industry’s first enterprise resource planning (ERP) platform. Akerna also offers Leaf Data Systems as a government resource for public sector compliance. Combined entities tracked more than $15 billion in world-wide, client cannabis sales to date. She is the first woman ever from the cannabis industry to receive the prestigious Fortune’s “Most Promising Women Entrepreneur Award” and is also recognized as one of Inc.’s “Female Founders 100.” Jessica received a degree in Communications and Computer Science from the University of Georgia and lives with her daughter in Denver.

GMR Executive Spotlight Q&A – 

Full birth name: Jessica Billingsley 

Title: Chief Executive Officer, Akerna and Chief Executive Officer, MJ Freeway

Company: Akerna and MJ Freeway

Years at current company:  Akerna launched in June 2019. Nine and a half years at MJ Freeway.

Education profile:  At 16 years old, I received a full academic scholarship to attend the University of Georgia, where I received a degree in Communications and Computer Science.

Most successful professional accomplishment before cannabis:  Prior to forming MJ Freeway, I built and managed technology operations with an emphasis on executive management, corporate culture, finance, and strategic relations. I launched my first company at 22, and I’ve been a successful founder, owner, COO and CEO of several companies.

Company Mission: Our technology empowers a compliant cannabis industry to prove outcomes that positively change lives every day.

Company’s most successful achievement: Nine years ago, my co-founder and I invented seed-to-sale tracking upon identifying the need for organic material tracking and compliance SaaS solutions in the growing cannabis industry. We were supporting one of the first cannabis dispensaries and grows in Colorado, and saw that cannabis needed technology built for it not adapted from other industries. And we believed visibility across the entire supply chain from seed-to-sale would be a requirement for the industry’s sustained growth. MJ Freeway was born with the launch of our patent-pending cannabis seed-to-sale technology. Today, seed-to-sale tracking is a requirement of most state’s that regulate legal cannabis. And to date MJ Freeway has tracked more than $13B in legal cannabis sales.

In 2017, in response to what I saw as the maturing of the cannabis market to multi-state enterprise businesses, MJ Freeway launched the cannabis industry’s first ERP. We also led the international expansion in the cannabis technology sector very early on in 2012 in Canada then into Spain. Today, our total international footprint spans 13 countries. Innovation and seeing what opportunities are next on the horizon – and then being ready for them first – is a hallmark of MJ Freeway and now Akerna. 

Most recently, I’m proud of an accomplishment that is a testament to the entire MJ Freeway team. Via a merger between MJ Freeway and MTech, a shell company formed for the purpose of acquiring a cannabis technology company, Akerna is the first software company that serves cannabis businesses to be traded on a major U.S. exchange. Akerna is traded on the Nasdaq under the ticker symbol: KERN. It’s an unprecedented milestone signifying a shift in beliefs and generating ripples of opportunity.  

Finally, I’m proud to have broken a couple of glass ceilings by serving as CEO of a technology company and holding a CEO position in a publicly traded company. Unfortunately, both are very rare occurrences. MJ Freeway launched last year the One Woman Challenge campaign to empower women in their careers. I want to reverse the growing decline of women in tech. It’s appalling to learn there’s a smaller percentage of women working in tech today than 25 years ago. Please learn more about the #OneWomanChallenge on our website and social pages and get involved. 

Has the company raised any capital (yes or no): Yes

If so, how much?: $25M in private financing prior to this most recent public transaction.

Any plans on raising capital in the future? Yes. Akerna’s strategy is to consolidate cannabis technology companies to connect data points in the global cannabis supply chain. Raising capital is a piece of our strategy to fully execute on Akerna’s strategy and is a reason for our listing on Nasdaq to be able to access more cost effective capital.

Most important company 5-year goal: To build the world’s most transparent and accountable consumer packaged goods supply chain. There’s an explosion of growth in consumers’ desire for transparency in products, which starts with transparency in the supply chain. With MJ Platform’s technology, I can tell you what farm the cannabis in your gummy was harvested from, what date it was harvested, and what nutrients were added prior to harvest. We can then follow the progression of the exact cannabis in that gummy until the moment it was sold to you. Seed-to-sale technology gives an unprecedented level of transparency across the supply chain. We intend to build on MJ Platform and grow Akerna through acquisitions to connect more data points across the cannabis supply chain and empower businesses, governments, and the public with the information they need to make better decisions. We are excited about the explosive growth of this industry and how compliance technology will underpin it. 


StaffStaffJuly 11, 2019
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4min10020
Antonio Frazier is the Director of Operations at CannaSafe, the first ISO licensed cannabis lab in the world and the leading marketshare holder in California.
Het met CannaSafe President, Aaron Riley, while playing football together at Furman University, where he earned a Bachelor of Science degree; he also holds a B.S. in Materials Engineering from Clemson.
Frazier began his career as a Nuclear Quality Engineer for the Tennessee Valley Authority, certifying and verifying final construction of nuclear components. He then moved to aerospace engineering, performing quality assurance for the foundry, testing lab, heat treat, and special finishing departments for SKF USA (Baltimore).
Antonio enjoys using his industrial, public safety focused skillset to forge the standards of a burgeoning industry; cannabis is just a huge bonus. He’s an English Premiere League fanatic (Chelsea), married with two sons, and resides in Los Angeles, California.
GMR Executive Spotlight Q&A –

Full birth name: Antonio Frazier

Title: Director of Operations

Company: CannaSafe (https://csalabs.com/)

Years at current company: 2 years

Education profile: Antonio played football at Furman University with Aaron Riley, current president of CannaSafe. He wanted a degree in engineering, but Furman didn’t have an engineering program, so he ended up driving between both schools for two years and received 2 B.S. degrees – one from Furman University and the other from Clemson University in Materials Engineering.

https://www.furmanpaladins.com/sports/m-footbl/spec-rel/091009aaa.html

Most successful professional accomplishment before cannabis: Reducing foundry scrap by over 25%, and therefore saved SKF USA over $100,000 per month on material waste. This lead me to win the 2015 SKF Excellence Award, a global recognition within the company. This was done by implementing new SOPs and six sigma practices, which lead to much better on delivery time of final parts and helped increase moral throughout the company.

Company Mission: To set the standard in cannabis science and ensure patients have safe access to medicine.

Company’s most successful achievement: Becoming the first ISO 17025 certified cannabis lab in the world. CannaSafe is now currently the market share leader for California compliance testing.

Has the company raised any capital (yes or no): Yes, but not publicly.

If so, how much?:  N/A

Any plans on raising capital in the future? Our team has not decided on this as of yet.

Most important company 5 year goal: To have multiple locations across the country, and to help establish Federal industrial hemp (CBD) testing requirements.

 


StaffStaffJuly 1, 2019
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3min4130
Vern Keenan is a new market visionary and serial entrepreneur. A graduate of Northwestern University with a degree in Bio-Medical Engineering, Vern established his career as a technical and networking Director at Genentech and Oracle corp, before becoming an entrepreneur. During the Internet boom, Vern made a name for himself as one of the foremost analysts for eCommerce with his firm Keenan Vision. Vern later started Berkeley Logic, a tech services and consultancy focused on the small to medium sized business market. From there, Vern started Telnexus LLC, a VOIP services telecommunication company. Vern developed and implemented the telecom tax calculation engine for Telnexus that was the precursor to the Taxnexus cannabis tax compliance solution.
GMR Executive Spotlight Q&A –

Full birth name: Vernon Keenan, III

Title: CEO

Company: Taxnexus, Inc.

Years at current company: 1

Education profile: Bachelors in Biomedical Engineering (BSc) from Northwestern University 

Most successful professional accomplishment before cannabis: Global tech analyst

Company Mission: Make tax compliance easy for all cannabis taxpayers

Company’s most successful achievement: Monetizing the only cannabis tax regulation database in the world!

Has the company raised any capital (yes or no): Not yet

Any plans on raising capital in the future? Currently raising a $1M round on a $5M-pre  SAFE suitable for angel investors or seed-stage funds

Most important company 5 year goal: Wow, five years…be the nexus for all things tax!


Anne-Marie FischerAnne-Marie FischerJune 20, 2019
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6min9080

Data is everything in cannabis right now. With this “data race” going strong, the cannabis industry is benefitting from useful data as firms compete to release the most interesting data on the profit-driving consumer behaviors of cannabis users.

Now, we have new insights on the why around cannabis use and overall cannabis attitudes, thanks to a new cannabis-related data set that the analysts call a “giant sandbox of data to play in.”

Consumer Research Around Cannabis has partnered with Radium Research LLC to provide the cannabis industry with insights they have never seen before through the use of predictive analysis, an approach to data that allows analysts to make predictions about future behaviors, attitudes, and consumer patterns.

Whereas the cannabis industry thus far has relied on attitude surveys, Point of Sale data and state reports to understand the who, what, where, when, and how of cannabis consumption, these new research partners are offering the why… and you may be surprised by what they found.

Using data from over 110,000 local market surveys that spanned the Greater Toronto Area and 85 U.S. markets, the analysts mined the 15 key factors that drive people to say that they support legal cannabis. Key indicators included voting behavior, whether they drink alcohol, whether they use tobacco and even looked at whether they attend religious services on a regular basis.

In their analysis of the data, what stuck out most is that the choice to support the legalization of cannabis is an issue of morality, and largely coincides with a person’s likelihood to attend regular religious services. For instance, in the case of Illinois, the analysts found that those who attended regular religious services were 83% opposed to cannabis legalization, while those who did not attend religious services were 89% in favor.

Jeffrey Stein, VP of Consumer Research Around Cannabis explained to Green Market Report that asking several hundred behavioral questions on medical and recreational cannabis use can offer predictive analysts a window to understanding the “key ingredients” that lead someone to support legal cannabis.

Dr. Paul Crowe, President of Radium Research, who created his company to apply his experience in predictive analysis in product innovation and segmentation, reminded us that a lot of the data going around in the cannabis space right now is like looking through a “rear view mirror”, whereas the approach of predictive analytics allows us to look ahead, and innovate.

“Innovation is the lifeblood of any company,” says Stein, “If you don’t innovate you’ll sink because someone will always innovate better than you. Once the “big guys” of the cannabis industry jump in [to the data game] you’ll need to know the future.”

This partnership between Consumer Research Around Cannabis and Radium Research offers the cannabis industry, policymakers and companies from other industries an opportunity to truly get into the heads of potential, current, and future consumers in order to predict what makes them tick.

An example of how this data can be used by cannabis companies is comparing purchasing data, for instance, individuals who use a vaporizer to consume cannabis, and their attitudes towards cannabis, and the reasons they use it. Companies in their marketing approaches can now understand certain drivers for consumers and market their products based on these indicated attitudes.

This team has partnered with NORML of Illinois & Chicago to offer their data, and the approach of predictive analysis, as a tool to help this group “know exactly where they need to go to change attitudes.”

 


StaffStaffJune 20, 2019
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5min8480

Scott Vickers is the co-founder and CTO of Headset, Inc., turning retail data into real-time cannabis market insights.

Headset helps companies in cannabis succeed by promoting better decision making via market intelligence offerings and operational insights in a sleek, intuitive and easy-to-use package.

Prior to founding Headset, Scott co-founded Leafly in 2010.  Scott built and managed the web and mobile applications used by millions, helping to grow Leafly into the world’s largest cannabis information resource.  When not wrangling data at Headset, he enjoys spending time outside hiking in the Pacific Northwest.

GMR Executive Spotlight Q&A – 

Full birth name: Scott Vickers

Title: CTO

Company:

Headset, Inc. (https://www.headset.io/)

Years at current company: 4

Education profile: BS Computer Science, Cal State Fullerton

Most successful professional accomplishment before cannabis: Throughout my high school and college career I worked as the sole developer at a small company providing services for mortgage banks.  That company expanded and grew and was eventually acquired, teaching me a lot about the business of SaaS along the way.

Company Mission: Our mission is to help businesses easily understand the cannabis industry through data analytics and market intelligence, enabling them to make better-informed decisions, unlocking success and pushing the industry forward.

Headset has built a data analytics platform that fosters a technology ecosystem to streamline cannabis retail and business operations, provide actionable insights, and help manage the increasing amount of complexity and fast pace of this nascent yet highly competitive industry.

From retail and vendor operations to deep market intelligence, Headset helps with business decisions across the cannabis supply chain.

Company’s most successful achievement: One of our most successful achievements is having struck strategic alliances with companies like Deloitte, Nielsen and Cowen to offer them and their clients best-in-class recreational cannabis market intelligence. It is a big validation for our mission and the quality of our platform and products.

Has the company raised any capital (yes or no): Yes

if so, how much?: In January 2019 we announced the completion of our Series A round of financing. Headset secured $12.1 million in funding from a group led by Poseidon Asset Management and AFI Capital Partners. Canopy Rivers Inc. also participated in the investment round.

Any plans on raising capital in the future? Having completed our Series A funding a few months ago, we are laser focused on executing towards our short and mid-term goals, which are: improving current products and services; expanding the company’s offerings to additional U.S. states and international markets; supporting Headset’s partnerships and strategic alliances, and serving new customers within the cannabis industry and from the CPG, beverage/alcohol, and financial industries, who are taking an increased interest in this market.

Time will tell whether we’ll be raising more capital in the future. Right now, it is all about execution.

Most important company 5 year goal: Our 5-year goal is to become the standard for Cannabis Market Intelligence across companies investing and operating in the US and other international markets where cannabis legalization ensues.

However, the only certainty, especially in this industry, is change, sometimes, very dramatic changes, from local and federal regulations to other market conditions, there’s a lot of moving pieces. Our 5-year goal could change based on those market conditions, but for now our north star is the one previously mentioned.

 


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5min25232

Today MTech Acquisition Corp. and MJ Freeway LLC announced the completion of their merger to form the Akerna Corp. MTech Acquisition Corp. (NASDAQ: MTEC), the first US-listed Special Purpose Acquisition Company (SPAC) focused on acquiring a business ancillary to the cannabis industry, and MJ Freeway, a leading seed-to-sale regulatory compliance technology provider and developer of the cannabis industry’s first enterprise resource planning (ERP) platform, has now become the first compliance technology company in the cannabis space to be traded on Nasdaq. Jessica Billingsley also becomes the first female CEO from the cannabis industry to lead a company that will trade on the exchange.

“As legalization of cannabis expands across the world, we believe it is imperative that businesses, patients, consumers, and governments have the tracking and compliance technology they need to make informed decisions and comply with applicable regulations. We believe Akerna is well suited to meet these needs with the ability to scale rapidly across the world and offer a robust and innovative platform for growing industry demands,” stated MJ Freeway Co-Founder & Chief Executive Officer Jessica Billingsley.

In addition to her role as CEO, Billingsley also serves on the Akerna Board of Directors and is joined by senior leadership from MTech: Scott Sozio, Tahira Rehmatullah and Douglas Rothschild. The Board of Directors of Akerna also includes Emery Huang, Matt Kane, and Mark D. Iwanowski, who were formerly members of MJ Freeway’s Board of Directors. Roger McNamee, who served as senior advisor to MJ Freeway’s Board of Directors, will act as Senior Advisor to the Board of Directors of Akerna.

The business combination between the two companies was approved at a meeting of MTech stockholders today. In connection with the transaction, MTech and MJ Freeway combined to form Akerna Corp. (“Akerna”). The shares of common stock and warrants of Akerna will begin trading on The Nasdaq Stock Market tomorrow, June 18, 2019, under the symbols “KERN” and “KERNW,” respectively. The company also announced raising $9.2 million prior to this closing.

“We are very pleased to close this transaction and look forward to capitalizing on the substantial operating and financial benefits we believe the combination will create. From here, we believe we are well positioned to pursue our acquisition strategy to drive transformation for future growth in the regulatory technology sector,” commented Scott Sozio, CEO of MTech. “We believe comprehensive, compliant, scalable technology solutions will underpin the industry’s rapid growth, and serve as a backbone for sustained success.”

Roger McNamee, Senior Advisor to the Akerna Board of Directors added, “Cannabis companies that want to be leaders are adopting MJ Platform, because it is the only ERP product with the technical foundation to support multi-line and multi-location operations. This transaction will enable MJ to better support customers manage high growth and complexity as the industry transitions from local to a global scale.”

Upon the closing of the transaction, the former MJ Freeway equity holders exchanged their securities of MJ Freeway for securities of Akerna, and the former equity holders of MTech exchanged their securities of MTech for securities of Akerna. As a result of the former MJ Freeway equity holders beneficially own approximately 62.7% of Akerna’s outstanding shares of common stock (including the shares held in escrow and unvested restricted shares); the former MTech stockholders beneficially own approximately 27.7% of Akerna’s outstanding common stock; and the investors in MTech’s previously-announced private placement that closed concurrently with the business combination beneficially own approximately 9.6% of Akerna’s outstanding shares of common stock. Legal counsel for the business combination was provided by Graubard Miller (MJ Freeway) and Ellenoff Grossman & Schole LLP (MTech).

 



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