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Akerna Acquires Cultivation Compliance Software Company Trellis

Deal Further Solidifies Akerna as the Scaled Tech Provider in the Industry

April 08, 2020 13:00 ET | Source: Akerna Corp. Akerna Corp.

Denver, Colorado, UNITED STATES

DENVER, April 08, 2020 (GLOBE NEWSWIRE) — Akerna (Nasdaq: KERN), a leading compliance technology provider and developer of the cannabis industry’s first seed-to-sale enterprise resource planning (ERP) software technology (MJ Platform®), will acquire cannabis cultivation management and compliance software company Trellis for $2.0 million in an all-stock deal. The deal is expected to close later this week.

“Trellis has built a great product that has attracted an impressive list of well-known California operators,” said Jessica Billingsley, CEO, Akerna. “We’re excited to be able to plug Trellis into our compliance bus, leverage our infrastructure, and profitably take Trellis into new markets where Akerna has an established presence. Trellis is an ideal fit for Akerna and delivers immediate accretive value to our shareholders.”

The acquisition is a compelling strategic fit for Akerna, expanding Akerna’s TAM into SMBs by providing a lighter-weight cultivation product. Akerna will leverage its existing product development and sales infrastructure to drive faster and more efficient growth, accelerating the conversion of Trellis’ large revenue pipeline. Over time, Trellis will also serve to funnel clients to Akerna’s enterprise offerings as they grow in size and sophistication. The transaction is expected to contribute positive cash flow and evidences Akerna’s position as the go-to buyer for cannabis technology, executing on the unique advantage of being the only Nasdaq-listed company serving the industry.

“As we looked to raise capital and continue scaling Trellis, I recognized that the environment was quickly changing and that Akerna had an enormous competitive advantage in the marketplace. We made the decision to join a winning team and I’m thrilled that Trellis is now part of Akerna,” said Pranav Sood, founder and CEO, Trellis. “With access to Akerna’s resources, we will be able to provide our clients with additional tools they need to manage their operations, including business intelligence, compliance, reporting, and access to Akerna’s ecosystem of integration partners. Joining Akerna delivers immediate benefits to Trellis’ customers and is the right choice for Trellis.”

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Akerna will acquire Trellis for $2.0 million, with 100% of the consideration paid in stock priced at the 30-day volume weighted average price and no assumption of debt. The transaction price is a 1.8x multiple of 2019 revenue of $1.1 million. Trellis’ selling shareholders are entitled to contingent consideration based on net new recurring revenue generated in September 2020, paid in stock, if any.

“In the cannabis industry today, we see consolidation, operational maturation, and a lack of access to capital for smaller players all within the context of growing consumer demand — it’s an exciting time,” said Jessica Billingsley. “Akerna is uniquely positioned to take advantage of the current environment. Our previously announced acquisition of Ample Organics remains on track and our M&A pipeline continues to grow, with target valuations that are becoming increasingly attractive as we execute on transactions like Trellis, proving our status as the go-to buyer for cannabis technology solutions.”

A presentation with more details on the transaction is available in the investor relations section of the Company’s website.

Best Cannabis Software for Seed-to-Sale Tracking

The best cannabis software for following legal weed’s complicated web of regulations.

Cannabis software is a necessity for weed businesses navigating the complex regulations surrounding legalization. Software also increasingly contains tools for businesses to keep track of their employees, the laws and generally keep their business in the black. These may consist of tax compliance tools, payroll and job boards.

Blablo101 | Getty Images

There are myriad options when it comes to cannabis software today. The best programs have multiple capabilities for regulators and businesses alike. Those on this list are already in wide use across the industry and are both easy to use and comprehensive.

Würk offers high levels of customized for small, medium, and large businesses that want to follow complex regulations all while hiring key employees and keeping payroll and expenses under control. This cannabis software emphasizes the following capabilities all within their mobile-friendly UX:

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Maximizing profits and minimizing costs

Hiring and keeping employees

Payroll and scheduling

Along with normal business considerations being more complex for cannabis businesses, they still have to deal with payroll, human resources, and employee operations like every other company. All of these capabilities are available through Würk’s platform, along with in-depth software for regulatory compliance and maximizing 280E deductions.

MJ Freeway

This cannabis software provides everything from seed to sale tracking to market forecasts for the industry. Specifically, their program can be tailored for different types of weed businesses, including vertically integrated businesses, dispensaries, delivery services, cannabis oil extractors and cultivators.

MJ Freeway provides data that goes beyond seed-to-sale tracking. For instance, they can calculate customer retention rates, help businesses submit licenses and create long-term financial plans.

BioTrackTHC

Tracking products is a major part of running a legal weed business. Additionally, that data gives you great insight into how to grow a business based on which are the hottest cannabis products, for example.

BioTrachTHC has the capabilities to create comprehensive data reports and provides marketing support based on that data. Specifically, this cannabis software caters to cultivators, dispensaries requiring point-of-sale systems, manufacturers and processors.

BioTrachTHC can be customized for any region because it contains the requirements for every unique license within every state. It can also be integrated with Metrc.

Metrc

Tracking products seed-to-sale is tough for businesses and government agencies. According to their own estimates, Metrc has more than 20,000 users in Colorado. Since 2013, this cannabis software system has tracked at least five million plants.

Metrc’s capabilities include tracking chain of custody and credentials of parties involved; analyzing trends of businesses within the system; registry of businesses, buyers, physicians, strains and other product information; tracking plants, packages and harvest.

Metrc was implemented in 2013 in Colorado when regulators were first confronted with the challenge of regulating cannabis. Today, creating a record of licensed businesses and giving governments a full overview of everything from individual harvests to licenses is a key part of bringing cannabis products to the shelves.

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Trellis

This cannabis software helps businesses follow regulations while providing actionable business analytics by enabling cultivators to track their harvests through every step, including charting crop yields.

Trellis software is designed for all types of cannabis businesses and has the following features:

A dashboard that displays cultivation, manufacturing and other updates in real time

Protected chain of custody records

Inventory tracking, including crop yields

Insight into trim yields and moisture levels

Cost per gram analysis

Plant tracking through every stage

Trellis provides high levels of customization for various types of cannabis businesses and can create reports on each.

More cannabis software solutions are available all the time.

Supply chain management is one of the hottest cannabis jobs right now thanks to the challenges of following complex regulations. But luckily for weed entrepreneurs, there are more cannabis software options than ever.

Trellis

Trellis builds software to keep you compliant and optimize your operations. Track plants across all stages of the cultivation and harvest processes to increase yields and efficiencies. Manage each stage of your manufacturing process from extraction and refinement to finished product. Manage your vendor, facilities, and wholesaler partners from one platform. Automatically generate purchase orders, invoices, and manifests. Trellis cannabis seed-to-sale management software does more than keep you compliant. We are on top of regulations, so you can focus on growing your business. Trellis gives you the tools and analytics to optimize your operations. Easy to use, implement, and configure to your operation. Trellis is technology that works for you. Trellis is seed-to-sale compliant with a unique multi-tier ID system to ensure traceability and accountability. Trellis uses advanced reporting and analytics throughout your entire growing process: from seed to sale.