Just in my opinion, the concept of break-even is a bad metric here. The real questions go something like this:
On the tech side...
First, can Citizen Toke generate repeatable income within its test markets (Denver/Boulder)? Yes
Second, can Citizen Toke deploy the same concept in more markets where weed is legalized? Yes
Third, can this technology be applied to other verticals outside of MMJ? Yes
Finally, is this technology competitive with other competing channels for users and paying customers (dispensaries for MMJ)? Simplicity and availability are huge. ANY dispensary and ANY consumer can have access to this.
On the market side...
Is the market Citizen Toke competing in large and sustainable in the long term? ($4 Billion for MMJ in 2016 and expected to continue growing, while marketing makes up between 1 and 5% of that market -> between 40 and 200 million annually) I would say yes to this.
Is that market growing or shrinking? More states are legalizing recreational MMJ, but fed crackdown (or maybe even full legalization) looms. Growing for now... with a large timeline towards any federal step in.
Is the company able to pivot to other verticals if necessary? (This tech seems deployable in other markets although making those connections could be difficult - alcohol for example)
Management side...
Is the current team capable of recognizing multiple opportunities and pursuing the best ones? (They are focused on one single product and appear to be making traction)
Is the team capable of recognizing its own weaknesses and filling the gaps and cutting the fat? (Patrick cut salary significantly and has made headway with Citizen toke + Tew cut a LOT of fat from previous overhead expenses like the office/management/employees/products/debt to focus on one single product with very low overhead.)
What about the BetaKillers team and how they integrate with Cannasys? They have deployed multiple moderately successful SMS marketing platforms before entirely on their own. Citizen Toke seems to be an iteration on previous platforms. They definitely seem to be the biggest asset to CannaSys right now in terms of strategy for deployment and far reaching tech vision.
Financial side...
Is the business model capable of generating a profit based on COGS and revenues? (SMS is incredibly high margin)
What type of timeline is needed to pull the company out of debt? (500K in debt?)
Does the company have access to capital to see this all the way through? (Kodiak for $3MM)
As the technology scales, will COGS go up or down? (I assume down since this is a web app).
While the PPS has been absolutely abysmal, the ingredients I've stated above have definitely improved for the at least makings of a quality and successful company + investment. Guess we will see how good the team is at putting these ingredients together.
