Helix TCS: A Clear Market Leader in Cannabis Ancillary Services
February 11th, 2019
Exclusive, News, Top News
The legal cannabis industry (“LCI”) is projected to reach nearly $150 billion in revenue by 2025, according to Grand View Research, driven by the legalization of medical and adult-use cannabis around the world. Despite these rapid growth rates, there’s a significant shortage of support services to help cultivators, wholesalers, processors, and retailers navigate the complex regulatory environments that have been setup by government regulatory bodies.
Helix TCS Inc. (OTCQB: HLIX) aims to close the gap by offering the world’s largest cannabis-focused suite of vertically-integrated services and technologies. After a string of highly successful acquisitions, investors may want to keep an eye on the stock as revenue continues to grow and new catalysts surface over the coming year.
Growing Demand for Support Services
Support services for the cannabis industry are underdeveloped and virtually non-existent, especially those that span across unique jurisdictions. At the same time, the cannabis industry faces an enormous regulatory burden that is challenging for many businesses to handle on their own. These dynamics have created an opportunity for startups to quickly capture market share as the cannabis industry continues to grow at a breakneck pace across the United States and around the world.
Helix TCS’ Critical Infrastructure Services Platform provides a level of risk management not found anywhere else in the industry. Over the past several years, the company made several accretive acquisitions and subsequently enhanced and grew the acquired revenue streams. The roll-up business model provides investors with rapidly growing revenue and market shares within the nascent cannabis industry’s ancillary services segment.
The company has made acquisitions across the technology, compliance, and security niche segments:
- BioTrackTHC is a pioneer in seed-to-sale tracking and government compliance software with thousands of customers throughout the United States and beyond, providing both revenue and upsell opportunities for other services.
- Cannabase has created the first LCI wholesale cannabis marketplace.
- Helix Security provides 360 degree business security frameworks with a special focus on cannabis industry compliance, providing video, alarm, and access control systems, as well as recurring revenue from remote surveillance or “virtual guard” systems; a high margin service that is highly attractive to licensed operators.
- Amercanex, a recent acquisition, will provide Helix with an Electronic Communications Network that will allow it to deploy the industry’s first compliant, real-time wholesale cannabis exchange to a global marketplace. The collective dominant market share of BioTrackTHC, Cannabase, and Amercanex, will be leveraged to build out the vast client base.
The company’s strategy focuses on acquisitions to synergistically build on these offerings, including the LCI wholesale commodity exchange, a software development firm, multi-state security expansion, and international product line expansion.
Experienced Team Delivers Results
Management’s breadth and depth of industry experience translates to best-in-class performance that meets any jurisdiction’s compliance requirements through cutting-edge technology and supply chain management solutions. CEO Zachary L. Venegas and CFO Scott Ogur have worked together in frontier markets and private equity for over 15 years, with multiple international ventures and successful exits.
Over the past three years, the company has grown to service over 2,000 cannabis businesses across retail, cultivation, and manufacturing sectors. One-fifth of Colorado’s largest cannabis businesses employ Helix security, while BioTrackTHC has captured about half of the U.S. dispensary point of sale software market and clients in multiple countries. The cross-selling opportunities between these businesses could propel growth over the coming quarters.
These strongly established networks and relationships with legal cannabis businesses from all segments provide a durable competitive advantage in regulated cannabis markets. In addition, the transactional data set from BioTrackTHC is the largest in the industry, having tracked over $18 billion in legal cannabis sales, and will provide Helix with the ability to monetize that data through a variety of premium service offerings.
Helix TCS Inc. (OTCQB: HLIX) is uniquely positioned as a clear leader in the cannabis technology, compliance, and security services business. With its portfolio of acquisitions, the company is rapidly growing revenue and unlocking value through cross-selling opportunities and other synergies with one of the largest customer networks in the regulated industry. Investors may want to keep an eye on the stock given these unique dynamics, particularly given the BioTrackTHC transaction and its recent developments.
For more information, visit the company’s website at www.helixtcs.com.
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