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 a 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 a very large 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 (based on a two-year revenue performance review).
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.”