Through our mobile applications and web portal, people use MassRoots to share their cannabis content, stay connected with the latest legalization news and follow their favorite dispensaries. With more than 900,000 users, MassRoots is one of the largest and fastest growing platforms for cannabis enthusiasts.
As of late May 2016, MassRoots has grown to more than 900,000 users. Over the coming months, the Company plans to introduce new features for users and fully index the network's public content on Google for SEO value, which we expect to accelerate our user growth.
A few weeks ago, MassRoots reported its second quarter earnings, generating more revenue in a single quarter than all previous quarters combined. Partnered with sizeable reductions in operating expenditures made this summer, we expect MassRoots to be cash-flow positive on a monthly basis by the end of 2016. Over 75% of these sales are expected to come solely from the Colorado and California markets, while the November 2016 elections have the potential to open or expand markets in 8 additional states. Our two closest comparables, Weedmaps and Leafly, are expected to generate more than $25 million and $15 million, respectively, in digital advertising revenue during 2016. Already with comparable userbases to both of these services, we believe our annual revenue run rate will grow to this range within the next 12 to 18 months.
We believe that if California voters pass Proposition 64 (60-31-9) and Florida voters ratify Amendment 2 (70-23-7), it will have significant implications for MassRoots’ revenue and user growth. If any combination of Arizona (50-40-10), Nevada (53-39-8), Massachusetts (50-45-5), Maine (53-43-4), North Dakota (unknown) or Arkansas (58-35-7) also pass cannabis initiatives, it will cause the growth rate to accelerate even faster.
When a state passes a medical or recreational cannabis law, MassRoots is able to start registering users and businesses in that state with minimal marginal cost. Because we are not involved in the production or sale of cannabis, we do not have to build grow facilities, open retail stores, or have a physical presence in the state in order to generate revenue. At the same time, MassRoots' financial model is not tied to the success of a particular location, brand or ballot initiative – we believe we will have a significant percentage of all dispensaries and brands on our platform, making MassRoots a play on the industry as a whole.
Sitting at the intersection of healthcare on the medicinal side and a vice industry on the recreational side, the cannabis industry can continue to grow in any economic climate. According to ArcView Market Research and New Frontier Financial, the regulated industry is expected to grow from $5.7 billion in 2015 to $23.1 billion in 2020, an annual compound growth rate of 35%.