Helix TCS: Capturing 53% of Seed-to-Sale Market Share

Helix TCS (OTC:HLIX) is the market leader in the seed-to-sale tracking business through its wholly owned subsidiary, BiotrackTHC.

Seed-to-sale tracking is a vital component of the legal cannabis industry due to the level of insight and transparency it provides. Companies like it for the compliance and operations insights they gain while regulators get the transparent views into the supply chain they desire.

Adapted from similar approaches in the pharmaceutical industry, BiotrackTHC lets producers and retailers track all cannabis products from seed and cultivation through every step of the supply chain and even track purchases to specific consumers.

All plants are assigned unique IDs in the system and then these numbers follow all products through the cultivation and production process. New unique IDs are created each time product goes through harvest or conversion processes so that each bit of product can be traced back through its production back to the original plant.

Cannabis that is transformed into oils, edibles, or other products is tracked so that any production losses are accounted for immediately. There is a documented chain of custody through its entire life cycle, even up to the point of purchase. This can be seen throughout the seven stages of compliance in the BiotrackTHC system:

1.       Cultivation
2.       Harvest
3.       Testing
4.       Transportation
5.       Point-of-Sale
6.       Patient Identification and Verification
7.       Real-Time Data Portal

The insights throughout the entire supply chain make it easy for producers to identify actions that impact yields. Real-time monitoring of yields means marginal improvements can be implemented on a continuous basis. The transparency also allows for quick action when a problem or contamination requires pulling a product from distribution.

Law enforcement and regulatory agencies can use the data portal to identify specific product anywhere in the production and distribution process.

Regulators love the seed-to-sale systems to make sure product is not diverted for illegal use, proper taxes are being paid, and that sales limitations are enforced. The precarious legality of cannabis in the US means some jurisdictions that allow for sale and use are adjacent to areas where it is still criminalized. Being able to track at all stages of the supply chain is imperative to ensure legal compliance and provide liability protection for the producers. For the foreseeable future, cannabis producers can expect to be subject to an intense level of scrutiny far beyond most other industries.

Since the tracking goes up to the point of sale, it’s also a powerful tool for retailers. They get complete sales records that identify specific products and customers and can easily use the system to enforce sales limitations or loyalty programs. Medical sales are linked to prescription records so that automated compliance records can be generated and provided to regulators as needed. The real-time, product-specific tracking data lets retailers identify sales trends and alter buying strategies much more quickly to best meet consumer demand.

Most areas that have limited cannabis sales (usually medical only) require cultivators and retailers to use seed-to-sale systems in order to receive a license to operate. BiotrackTHC has the government contract for seed-to-sale tracking in 7 states, 1 city, and Puerto Rico (9 total government contracts) all which have legalized cannabis use. They are the biggest competitor in both medical only and adult-only sales markets.

For states with medical-only sales, BiotrackTHC has 53% of the total market share in seed-to-sale tracking. Their biggest competitor in this space is MJ Freeway, who has 29% of the market, has also had some highly publicized problems in states like Pennsylvania, where issues with system crashes and data hacks have briefly halted all cannabis sales on multiple occasions. BiotrackTHC is used in 32 states and multiple countries where cannabis is partially or fully legalized.

Helix TCS has continued expanding internationally as the increasing legalization of cannabis production allows them to take advantage of lower production costs in other markets. Most recently, their expansion into Colombia offers the potential for tremendous savings on production and cultivation. Production costs in Colombia are approximately 97% cheaper per gram than in Canada.

Between the industry-leading position of BiotrackTHC and their own cultivation and distribution work around the world, Helix TCS has the potential to take advantage of the growth of the legalized cannabis industry far more than its competition.