This company doesn’t spend much on marketing, but POSaBIT (TSXV: PBIT, OTC: POSAF) is on fire. If you had invested in early 2021, you would already be up 450%. POSaBIT works exclusively within the cannabis industry by providing a Point-of-Sale solution and is also a cashless payment provider for cannabis retailers. The company recently acquired Hyper and expects to be profitable by the end of the year 2023. 

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Company Overview

POSaBIT  (TSXV: PBIT, OTC: POSAF) is a FinTech that only serves the cannabis business. The company is the premier cashless payment service for cannabis businesses and offers a best-in-class Point-of-Sale system. POSaBIT puts in a lot of effort to provide better financial services and ways of transactions for businesses. The company puts a lot of work into providing cutting-edge software and technology to the cannabis market so that all merchants can benefit from a secure and legal set of services to address the issues associated with a cash-only sector.

Here are some examples of POSaBIT’s advantages over cash: 

- In typical retail environments, cash is only used in 11% of all transactions (down from 16% in 2018).

-The average card transaction is almost double the average cash transaction. 

-Approximately 70% of all dispensaries across the USA remain exclusively cash only.

The company has massive growth. Established in November 2015, POSaBIT went public on 2019, launched its first fully mobile Point-of-Sale System & reached profitability, and now grows by integrating companies into its “portfolio.” The most recent company POSaBIT acquired is Hyper,  a payments solutions provider. Hypur is a top supplier of sustainable, compliant payment and bank compliance solutions for high-risk sectors, including cannabis firms. Since 2016, Hypur has established a number of relationships with American banks and credit unions that use their technology to offer banking and payment services to the cannabis business. The acquisition includes Hypur Comply, Hypur Pay, and the PIN debit merchant processing service from Hypur. With the acquisition, POSaBIT is now able to provide the cannabis industry with a broader range of payment and compliance solutions, including redundant PIN debit payment processing, Hypur Pay, the industry's top ACH eCommerce and mobile payment solution, and Hypur Comply, compliance software for financial institutions that work with the cannabis sector. With the purchase, POSaBIT now gives cannabis dispensaries, processors, growers, distributors, and the financial institutions who serve them a one-stop shop for all payment and bank compliance requirements.

"We are thrilled to announce that POSaBIT has acquired Hypur, a leading provider of compliance and payment solutions for the cannabis industry. This acquisition marks a significant milestone for POSaBIT as we continue to expand our footprint and capabilities in the rapidly growing cannabis payments and point-of-sale market." 

Ryan Hamlin, CEO and Co-founder of POSaBIT.

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Share Structure / Financials 

You will love the company’s 2023 guidance. POSaBIT expects to generate between $60M to $63M in revenue, $15M to $17M in gross profit, and report a positive EBITDA. 

"Our business continues to grow at a high rate, significantly outpacing the growth rate of the cannabis market as a whole. 2023 is off to a great start; our teams are highly engaged with merchants to optimize and fully integrate both our point-of-sale and payments platforms to increase same-store sales and improve efficiencies for the merchants and the customers they serve. We also look forward to closing our recently announced acquisition in the second quarter of 2023."

Ryan Hamlin, CEO and Co-founder of POSaBIT

For the quarter ending September 30, 2022, the company generated $10.3M  in revenue and had a $2.89M gross margin. Nevertheless, POSaBIT had a $1.2M loss. Keep in mind several companies are being acquired. As an example, Hypur generated US $5.3M in revenue and US $1.3M in gross profit. What will be interesting to know is what the company will do once it turns out profitable. Earlier in the year, POSaBIT acquired 3 other companies: MJ Platform, Leaf Data Systems, and Ample Organics. These companies were expected to generate approximately US $11M in revenue and US $6,8M in gross profit. 

About the share structure, the company had 138.4M shares issued and outstanding, 10.3M warrants at an avg. price of $0.27 and 12M options at an avg. price of $0.14. There are also $1M restricted share units at $0.83. Since 2021, the stock price has picked up some steam. Initially, at $0.18 (January 4, 2021), the stock price went to an all-time high of $2.00 (November 8, 2021. Now, the stock price is still above the dollar range but lost some of its value. Regarding the 52-week range, the stock price hovered between $0.50 to $1.47. 

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Bottom Line

POSaBIT (TSXV: PBIT, OTC: POSAF) continues its incredible growth. The company has acquired 4 other businesses that will subsequently grow its revenue. Another exciting news is the road toward positive EBITDA that will occur before the end of 2023. Despite the tech sell-off, POSaBIT appears to be a strong asset.

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