The U.S. medical and recreational marijuana industry continues to expand. Even though the debate over medical efficacy and the concerns over recreational marijuana use continue to cause political and social divisions within the country, the investment community is moving rapidly from benign interest to embracing the marijuana industry as a significant investment opportunity.
At the recent 29th annual ROTH conference, an investment conclave attracting global financial gurus, even traditionally conservative industries like private equity groups took serious consideration of the marijuana market opportunities. The opening conference panel discussion centered on the medical uses for marijuana and emphasized the upside potential in the burgeoning marijuana market that is already underway.
In attendance at the conference and presenting to fund managers and investment advisors was GrowGeneration Corporation (OTC: GRWG). GrowGeneration currently owns and operates 12 specialty retail hydroponic and organic gardening stores with locations in Colorado, Nevada and California. With the company’s focus on owning and operating branded stores in all of the major legalized cannabis states, it currently sells thousands of products to facilitate the cultivation of marijuana for commercial and home growers.
GrowGeneration went public last year and is fast moving toward its objective of becoming the first company in its vertical on the NASDAQ stock exchange. Interviewed at the conference, Darren Lampert, CEO of the company, stated in part, “Investors are seeking out investments in the cannabis industry and are hoping to profit from the fastest growing new market in the USA in some time. GrowGeneration benefits from all sides as more growers come to us for their equipment and nutrients, which is why we were able to grow as exponentially as we have without directly touching the end product.” By supplying a vast array of specialty retail hydroponic equipment, lighting, and organic nutrients and soils to horticulturalists and marijuana cultivators, GrowGeneration is focused on reaping rewards from the explosive growth of this fledgling industry.
Already one of the nation’s largest specialty retail hydroponic and organic gardening store chains, GrowGeneration acquired all of the assets of Sonoma Hydro last month creating a $2.5 million northern California retail distribution center. Northern California’s “Emerald Triangle,” home to a large concentration of cannabis cultivators, is a significant growth opportunity for the company, with the market projected to grow at a compounded annual rate of 18.5%, reaching $6.5 billion by 2020.
Further validation of the huge potential of this market can be found in GrowGeneration’s press release last week. The company announced that Merida Capital Partners, a cannabis infrastructure fund, has provided GrowGeneration $1.65 million in equity financing. When factoring in warrant exercises, funding will total $3.92 million in capital. Merida Capital Partners priced callable warrants at $4.12 or higher, an obvious indication of its belief in the company.
Whether one agrees with the surge in the cannabis industry or not, there’s no denying the wizards of Wall Street are believers. Now may be the time for individual investors to participate and potentially profit from one of the fastest growing new markets in America, which is occupied by a number of other innovators such as: MyDx, Inc. (OTCQB: MYDX), which offers CannaDX, a unique device that allows anyone to directly test cannabis products for THC, CBD, and CBN potency; Innovative Industrial Properties, Inc. (NYSE: IIPR), which focuses on an entirely different aspect of the industry, helping licensed MMJ growers meet capital needs by purchasing their grow-land and leasing it back to them; Terra Tech Corp. (OTCQX: TRTC), which designs and sells its own specialized hydroponic and associated equipment for indoor growing, in addition to the retail selling of cannabis products; and Aphria, Inc. (OTCQB: APHQF), which produces and sells a variety of “100% Greenhouse Grown” cannabis products throughout Canada.