Troy Dayton of Arcview writes…..Last week, the news broke that MJ Freeway signed an agreement to merge with public vehicle MTech Acquisition Corp. (Nasdaq: MTEC) in a deal that valued MJ Freeway at $70 million and will leave the combined entity with a balance sheet of $60 million.

At Arcview’s investor forum in Vegas November 11-13, I’ll sit down with MTech’s Tahira Rehmatullah and MJ Freeway’s CEO Jessica Billingsley for a fireside chat to discuss how it all went down and what they plan to do with the largest balance sheet among software companies in the cannabis sector.

 

MJ Freeway dominated the point-of-sale and inventory management space in the cannabis sector with very little competition for a long time, boasting by some estimates a 30% market share as late as 2016.  In late 2016, the company announced the launch of their enterprise resource planning system: MJ Platform.

Then, just as a few serious competitors started to enter the space and gain traction among VC’s, MJ Freeway hit a major snag – a security breach that shut down the entire system for days. This emboldened competitors and turbocharged their fundraising.  Companies like Flowhub and Greenbits who pitched on Arcview’s stage were capturing market share. Greenbits recently closed on $17 million from well-known tech VC Tiger Capital.

Then a few weeks ago, MJ Freeway announced a $10 million Series C global raise followed up by the news last week of this public merger.  Now with both the largest marketshare and the largest balance sheet, how will they capitalize on this moment? Will they buy their competitors out?  Will they expand into other software offerings?

MJ Freeway was the very first company to pitch at Arcview in 2011.  It was there that they met philanthropist and investor Joby Pritzker (SpaceX, Pax) who eventually led their A round a few years later with well-known tech investor Roger McNamee (Palm, Inc., Forbes, and Facebook).