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Cannabis POS and Payments Company POSaBIT Buys Hypur

POSaBIT, a Seattle-based cannabis point-of-sale (POS) and payments software company, this morning announced its acquisition of cannabis and crypto payments and compliance services company Hypur in a cash and equity transaction valued at up to US$7.5 million

The acquisition positions POSaBIT as the only cannabis payments provider with redundant PIN debit processing through the addition of Hypur Pay, an ACH eCommerce and mobile payment solution. 

“What we’re really excited about is … the fact that we’re able to have multiple different PIN debit networks,” Jesse Swingle, POSaBIT’s director of marketing, told Cannabis Business Executive in an interview. “Everybody in the industry was shaken a little bit by the point-of-banking shutdown earlier this year.” With this acquisition, “should anything happen [with the company’s primary PIN debit provider], which we don’t expect, we now have redundancy, which means that there’s not a point at which we’re ever going to be worried about [payments services] shutting down.”

The deal also adds Hypur Comply, a compliance technology for financial institutions serving the cannabis industry, to POSaBIT’s portfolio. With this deal, POSaBIT now can service all payment and bank compliance needs for cannabis dispensaries, processors, cultivators, distributors, and their financial institution partners.

Hypur has been providing cannabis payments services to retailers and banking compliance tools to financial institutions supporting cannabis, cryptocurrency, and other high-risk industries since 2016, and today’s acquisition by POSaBIT will see nine Hypur team members remain with the company, including Hypur CEO Michael J. Sinnwell, Jr., who will lead POSaBIT’s payments operation in an executive role.

“We’ve been blown away … by the technical expertise that exists on their team. That’s going to be huge for us,” Swingle said.

This is the second acquisition deal that POSaBIT closed so far in 2023. This deal with Hypur comes just over two months after POSaBIT acquired assets from Akerna, before Akerna pivoted to cryptocurrency mining.

Discussing how the deals align with POSaBIT’s long-term goals, Swingle said “The Akerna acquisition was a little bit of a broadening, while this [Hypur deal] is a deepening into our fundamentals.

“Hypur felt like a natural part of what POSaBIT does really well, which is payments and point-of-sale. Hypur has a really compelling, incredibly unique offering within the cannabis payment space. They had technology and connections with banks and institutions that we didn’t have. So we’re gonna bring that to bear,” Swingle noted.

The deal is also similar to the Akerna deal in that it came with relatively favorable financial terms for POSaBIT. The Seattle company acquired assets from Akerna for 0.4 times the estimated 2022 revenue of those assets. The deal with Hypur is valued at 1.4 times 2022 revenue, although POSaBIT is only putting up $1.5 million in cash. Hypur brings with it more than 150 active merchant locations, with more than 60 other merchant locations expected to go live in the next 90 days, according to POSaBIT’s press release announcing the deal.

Hypur users will be integrated into POSaBIT’s product suite, allowing them to be more flexible with their software providers by granting them access to POSaBIT’s suite of integrations. “Hypur Pay, their ACH solution, will almost certainly face a rebrand, but the technology itself is solid,” Swingle said, adding that POSaBIT is already working on integrating Hypur’s PIN debit solution into its existing payment solution.

“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,” said Ryan Hamlin, CEO and Co-founder of POSaBIT, in a press release.

Swingle noted this likely wouldn’t be the last deal POSaBIT considers or even executes on, pointing to the shaky position in which certain companies find themselves in the present uncertain market conditions. “We’re definitely in conversations with a lot of different folks,” he said. “The companies who are invested in the industry and invested in the community are doing okay right now, and the folks that borrowed $100 million to try to make a go of things, they’re the ones who are looking a little shaky right now. 

“It’s because they weren’t invested in the community, they weren’t invested in the technology.”

Brian MacIver

Brian MacIver

Brian MacIver is a freelance writer and editor based in Vancouver, British Columbia. He also is Partner and Director of Strategic Communications for Guerrera: The Agency, a boutique communications and marketing agency serving small businesses, nonprofits and progressive groups. He can be reached at [email protected]

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