Grow Solutions Holdings Inc (OTCMKTS:GRSO) has been lagging the movement in the cannabis space during the recent sector momentum, but just announced some key news that the market reacted to in a big way: Grow Solutions Holdings Announces Plans to Expand its Grow Store Operations. This amounts to a 25% expansion in the company’s hydroponic supplies segment in the red-hot Oregon cannabis cultivation market.
The whole cannabis space has been launching – as we’re sure you know – on anticipation of a massive expansion in the legal sales footprint for the marijuana-related space on November 8, when just under a third of the US population is set to cast ballots shaping the future of Homo Cannabensis Amercanis. Will he be relegated back to the shadows of a thriving black market, or finally see the sun rise over a country truly moving towards a radically new relationship with marijuana? As the vote nears, the financial media are starting to pick up on the story which may amount to pouring gasoline on the fire.
Grow Solutions Holdings Inc (OTCMKTS:GRSO) trumpets itself as a company that provides a range of products and services in the legal cannabis industry for growing, processing, and dispensing cannabis and cannabis related products in the United States.
It is involved in the retail sale and distribution of indoor and outdoor garden supplies and grow equipment, including for the legal growing of cannabis.
The company also provides consulting services, including design and construction services to approved and licensed legal cannabis operators, as well as assistance with licensure and related applications for potential legal cannabis operators. Grow Solutions Holdings, Inc. was founded in 2014 and is based in New York, New York.
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The chart for shares of GRSO stock shows 80% piled on for shareholders of the listing just over the past few days, a bounce that has taken root amid largely bearish action over the larger time frame. But this is emblematic of the group right now: Breaking news showing expanded sales volume potential is an ROI issue. And right now, the market is going to excited about expanding channels when they offer increased access to a bet on marijuana cultivation, particularly in Oregon.
In addition, GRSO is a stock with a few rips in its past. It’s also seeing a big influx of trading volume (with the stock’s recent average trading volume running over 10,000% beyond its prior sustained average level) on a very limited float — under 24M shares. We often point this dynamic out when it’s clearly a factor. A stock’s movement in price per share is a function of supply and demand for shares. Yet, too often, market participants only concern themselves with demand — It’s important to consider the supply as well, particularly when volume and attention are qualitatively shifting, as is the case here.
In its recent announcement, the company notified investors that it has executed a letter of intent to acquire West Coast Organic and Hydroponic Supply (WCO) in Boring, Oregon.
According to the release, “the acquisition is a strategic addition to the Grow Solutions family of grow stores operating under its wholly-owned subsidiary, One Love Garden Supply. Upon completion of this acquisition, One Love will have a total of five stores; four retail and one online.”
“Oregon is a thriving market for the legal cannabis industry and WCO is located in the heart of the growing community with over 50 licensed cannabis growers within a ten-mile radius of the store,” stated Jeff Beverly, Chief Executive Officer of Grow Solutions. “With this acquisition and our current operations we are forecasting, on an unaudited basis, to exceed $10 million in revenue for the coming year in this division. Our three currently operating stores in Colorado are doing approximately $7 million on an annualized basis with roughly an additional $1.7 million for the online operation. The historical revenues at WCO are approximately $2 million giving us the total of over $10 million projected for 2017. In keeping with our aggressive expansion plans, we are completing our due diligence on additional acquisition targets nationwide and will announce those as developments occur,” continued Mr. Beverly.
Grow Solutions appears to be headed in the right direction overall. Currently trading at a market capitalization of $29.7M, GRSO has a decent store ($193.88k) of cash on the books, along with total assets just shy of $2.1M, which is balanced by an appreciable load ($949.78k) of total accumulated debt. This is hardly an ideal balance sheet situation. But growth heals all wounds and the trajectory for sales here is potentially quite good. It’s an exciting story and we will continue to track it closely. For continuing coverage on shares of $GRSO stock, as well as our other hot stock picks, sign up for our free newsletter today and get our next hot stock pick!
