Kirkland-based cannabis payments company POSaBIT has acquired technology from Phoenix-based competitor Hypur for $7.5 million in cash and equity.
The acquisition, announced Monday, gives POSaBIT more payment services to offer cannabis retailers, and it provides POSaBIT a way to work with financial institutions. Nine employees from Hypur, including CEO Michael J. Sinnwell Jr., are joining POSaBIT through the deal.
"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, said in a news release.
A POSaBIT spokesperson said the company is also adding two former Hypur employees as contractors; Hypur had 12 full-time employees and one contractor before the acquisition. POSaBIT now has 68 full-time employees, the spokesperson added, and the company doesn't yet have a timeline on what to do with the Hypur brand.
In the deal, POSaBIT has acquired the cannabis ACH payment solution Hypur Pay, the cannabis banking software Hypur Comply and Hypur's cannabis debit payments technology. Allowing cannabis dispensaries to accept debit and ACH payments is a difficult proposition since cannabis is still federally illegal, making dispensaries a difficult target for traditional financial institutions to serve.
Hypur, founded in 2014, has processed over 627,000 payments. The three solutions it's selling generated about $5.3 million in revenue last year, according to the release, and Hypur Pay has more than 165,000 consumer profiles.
POSaBIT, meanwhile, was founded in 2015. Like Hypur, the company helps cannabis dispensaries accept debit card and ACH payments. It also provides a mobile point-of-sale system called Pocket POS. In January, POSaBIT announced it was acquiring three cannabis software businesses from parent company Akerna for a total of $4 million, and POSaBIT raised almost $3.8 million through a private placement in June.
With the addition of Hypur Comply, POSaBIT is stepping into the same space as Seattle-based Shield Compliance. Shield, launched in 2014, helps banks and credit unions navigate the risks and regulations that come with serving the cannabis industry.
In its third quarter 2022 financial results, released in November, POSaBIT said it generated $10.3 million in revenue for the quarter, up from $6.4 million in the third quarter of 2021.
"We have been providing compliance and payment technology to financial institutions serving the cannabis industry for nearly a decade and look forward to expanding our reach with POSaBIT," Sinnwell Jr. said in the release.
