Helix TCS, Inc. (HLIX) $1.44
With a market capitalization of 101 million, $7 million in revenue on 72 million shares outstanding, excellent management core and a focused business model, HLX is worth a long term commitment* in the $4 to $7 with a future for even more.
The move provides the company with a scalable wholesale transaction model. Consolidating wholesale transaction technology in the cannabis space even further, Helix TCS announced this week its acquisition of Amercanex International Exchange. The move follows Helix’s 2016 acquisition of Cannabase. Together, the suite of blockchain-backed wholesale tracking platforms provides Helix’s CEO, Zachary Venegas, with broad scaling capabilities as more cannabis markets come online. Right now, Amercanex is operating in 18 U.S. state markets. Venegas intends on expanding that market reach and blending Amercanex’s capabilities with Cannabase (another wholesale transaction platform based in Colorado).
“Those are robust, time-tested companies that have survived that have an extensive database of operating history,” Venegas says. “Both of them are very focused on compliance—and a compliant marketplace.” With Cannabase and Amercanex under the Helix TCS umbrella now, the company has a foothold for U.S. expansion. Those two acquisitions also join Helix’s 2018 merger with BioTrackTHC, a seed-to-sale tracking platform; BioTrack clients will have access to the Amercanex exchange.
The company acquired Amercanex in a $15-million all-stock deal, and shareholders may receive an additional $5 million in Helix stock. For Venegas, this move falls into a broader movement that’s starting to become clear in the U.S. Incoming Attorney General William Barr has said that he does not intend to “go after” cannabis businesses, thus counteracting the past year of former Attorney General Jeff Sessions’ anti-cannabis stance. In the absence of any legislation and with the rescission of the 2013 Cole Memo, though, cannabis businesses do remain in uncharted territory in the eyes of the federal government.
“You have network effect: You have to be able to attract enough buyers and sellers to make your market go,” Venegas says. “When you’re doing a wholesale operation, now … you’re talking about moving large amounts of cannabis within a state. They can transact for a pound, but they can also transact for 200 pounds. There’s a market consolidation aspect to that.”
Why Deal is Important?
The acquisition allows Helix TCS to strengthen its position in the ancillary cannabis space.
In March 2018, Helix merged with BioTrackTHC, the provider of the most popular point-of-sale system among U.S. dispensaries. In 2016, it acquired Cannabase, a wholesale portal for licensed cannabis businesses. Together with BioTrack and Cannabase, Amercanex will be part of Helix's Critical Infrastructure Services Platform.
Who is Helix TCS, Inc.?
Helix TCS, Inc. provides technology, compliance, and security solutions to the legal cannabis industry in the United States. The company offers security solutions to cannabis businesses, including assessments and planning, security system design and implementation, asset protection, transport, and assurance of security for the state licensing process. Its security products and services include IP CCTV systems, intrusion alarm systems, perimeter alarm systems, access control, and security consulting. The company also provides physical security solutions, such as armed and unarmed guards, armored transport, background checks, investigations, and risk assessment, as well as armed transportation services. Also, it operates Cannabase, an online community for registered legal cannabis license holders.
Further, the company develops and licenses seed to resale cannabis compliance software to private-sector and public-sector clients that are involved in cannabis-related operations; and offers on-going training, support, and software customization services. Helix TCS, Inc. is based in Greenwood Village, Colorado. Helix TCS, Inc. is a subsidiary of Helix Opportunities LLC.
* Conclusions are based exclusively on our proprietary SPGTM algorithm.
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