Legal cannabis point-of-sale provider POSaBIT Systems Corp. (CSE: PBIT) has acquired assets from bank compliance firm Hypur Inc. for up to $7.5 million in cash and equity.
Hypur is known for providing compliant payment and bank compliance solutions for high-risk industries such as state-legal cannabis.
The acquisition includes Hypur Comply, Hypur Pay, and Hypur’s PIN debit merchant processing solution. Hypur Comply is the compliance technology arm for Monday’s seller, while Hypur Pay is its cannabis ACH e-commerce and mobile payment solution.
The acquisition positions POSaBIT as the only payments provider in the cannabis industry with multiple processing solutions, which provides redundancy and enhances reliability.
Having redundant payment processing is particularly important in the cannabis industry, which faces unique regulatory challenges and cannot rely on traditional financial services.
Additionally, the deal adds a cannabis bank compliance platform to POSaBIT’s offerings, which allows the company to build and maintain relationships between financial institutions and cannabis businesses.
Hypur said that it has partnerships with multiple banks and credit unions throughout the United States, and now POSaBIT will have access to its “extensive” network of banking relationships.
“With the acquisition, POSaBIT now provides a one-stop shop for all payment and bank compliance needs for cannabis dispensaries, processors, cultivators, distributors, and the financial institutions that serve them,” the company said in a statement.
The addition of more than 150 active merchant locations also comes with the deal, representing more than $100 million of annualized payment gross merchandise value, with roughly 60 merchant locations expected to go live in the next 90 days.
The acquisition also adds strong B2B capabilities, including invoicing and ACH payments, allowing POSaBIT to provide merchant services to cannabis cultivation and grow operations.
Ryan Hamlin, CEO and co-founder of POSaBIT, said that the deal marks a “significant milestone for POSaBIT as we continue to expand our footprint and capabilities in the rapidly growing cannabis payments and point-of-sale market.”
POSaBIT and similar ancillaries have been making strategic moves to snap up competitors and mutually benefiting partners alike in order to beef positions as point-of-sales providers in the legal cannabis space.
The news also comes as U.S. regulators attempt to cushion a fallout in the banking industry after Silicon Valley Bank went under.
The deal is expected to add around $5.3 million in revenue and $1.3 million in gross profit to the company’s 2022 financials as management prepares to report its financial results for the fourth quarter and full fiscal year near the end of this month.
The company is set to host a conference call on April 26, 2023, to discuss its earnings results and Hypur acquisition, as well as provide full-year 2023 guidance in light of the closing.