Cannabis social networking platform MassRoots is developing a crypto token and other blockchain-based applications for its ecosystem of more than one million users.
MassRoots outlined its vision in an annual report filed with the Securities and Exchange Commission on Tuesday, adding that it formed a subsidiary – MassRoots Blockchain Technologies – to explore applications of the technology in December. It has engaged software company MEV to work on the development of the applications.
According to the report, the company has moved to sell Simple Agreements for Future Tokens (SAFTs), collecting more than $900,000 between September and January. Of that amount, $250,000 has been invested in the development of “blockchain-powered features and utilities.”
Founded in 2013, the company’s app is somewhat akin to a cannabis-specific Yelp, allowing users to rate cannabis products and strains. The publicly-traded company has had a colorful history, having its app banned from Apple’s online store in a move that was later reversed.
MassRoots explained in the report that blockchain could improve the quality of information available to consumers on its platform, among other things.
“Currently, a number of technology companies are attempting to curate the best information available on cannabis products and strains,” the document reads. “However, the number of cannabis product reviews are low, such reviews are often biased and the most commonly reviewed products received greater exposure than the less reviewed products.”
MassRoots went on to explain that the introduction of a token based on the ERC-2o – running on the ethereum network – standard could create a better system, explaining
“To provide additional information so that cannabis consumers can make better informed purchasing decisions, we plan to utilize digital instruments as a form of reward based currency within the MassRoots platform to encourage high-quality reviews, including reviews of new products, which we believe will also incentivize user-growth and stimulate our platform’s overall activity.”
According to the filing, users will be able to earn tokens through writing reviews. Initially, users will only be able to use the tokens to purchase products and services within the MassRoots ecosystem, but the company said other businesses in the industry – such as vaporizer manufacturers – could also use the tokens one day.
However, the annual report also disclosed that the company posted a net loss of $44 million for 2017.
As detailed by The Cannabist, a marijuana-industry news site, MassRoots’s report “provides a portrait of a negative-net-worth company that is burning through cash, missing IRS payments and SEC reporting deadlines, handing out stock-based compensation like candy, and operating with no external sources of liquidity.” Whether these issues affect MassRoot’s cryptocurrency ambitions remains to be seen.
Man smoking cannabis image via Shutterstock