Indoor Harvest Corp (OTCMKTS:INQD) is a Houston-based micro cap that is a potential indirect play on the cannabis industry. All the momentum around cannabis industry stocks is also boosting the near-term prospects for stocks like Indoor Harvest Corp (OTCMKTS:INQD), which is primarily known as a premier vertical farming and indoor farming specialist.
The company originally planned to divest its cannabis assets and operations this year, but now those plans are in flux. That’s heating up investor expectations about what might be next for INQD and how it might proceed with its cannabis operations.
Indoor Harvest Corp (OTCMKTS:INQD) shares are currently trading around $0.59, giving the company a market capitalization of $7M. Over the most recent 52-week period, shares have traded as low a $0.17 and as high as $0.74.
The primary focus around Indoor Harvest Corp. right now is the stalled deal with Minnesota-based Head North LLC. In late September, INQD announced that Head North was in non-compliance with the terms of the deal, which would have resulted in Indoor Harvest selling off its cannabis operations and assets to Head North.
In July, the company’s board of directors had already approved the deal, seeing it as a way to reduce investor uncertainty around the company and enable INQD to focus squarely on its Controlled Environment Agriculture (CEA) operations. Cash from the deal would have been used to pay off promissory notes, and would have given Indoor Harvest an improved capital operating structure.
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Now, says Indoor Harvest, those plans have changed. It needs to pay off its promissory notes, or risk default on those notes. If Head North can’t acquire the assets and operations, then Indoor Harvest will have to sell them to someone else. The plan now appears to be to sell those assets to a deep-pocketed pharmaceutical group. That comes as the U.S. DEA has opened up the field of cannabis research, making Indoor Harvest’s work with controlled environment agriculture very valuable to pharmaceutical companies looking for cannabis treatments.
How Indoor Harvest plans to move forward will largely determine its future valuation. By getting more involved in the cannabis industry, the company would be poised for a huge financial windfall, especially as nine states consider ballot initiatives on November 8 to legalize either recreational or medicinal marijuana. In April 2016, Indoor Harvest Corp. had announced a potentially landmark cannabis case study in Washington State, and it’s obvious the company has a lot to offer potential cannabis growers.
But the path forward for Indoor Harvest will probably be as a design-build contractor for vertical farming and indoor farming. The company offers a wide range of engineering, procurement and contractor services, and those could be just as easily leveraged for the cannabis industry. The company manufactures a wide range of indoor farming equipment and fixtures, including those marketed under the well-known Indoor Harvest brand name, such as the Modular HP-Aeroponics Platform, Shallow Raft VFRack Platform, and Low Tide VFRack Platform.
The company is an expert in technologies such as greenhouse production, hydroponics, aquaculture, aquaponics and aeroponics. It’s that innovative approach that has enabled Indoor Harvest to create a number of impressive showcase projects, such as MIT City Farm in Cambridge, Massachusetts and the City of Pasadena’s “CLARA” initiative in California.
Investors, then, should keep in mind the company’s extensive R&D potential and wide range of top-quality products. There’s obviously a bright future ahead for Indoor Harvest, especially if it can find new ways to monetize this R&D work and controlled environment agriculture work for the rapidly-expanding cannabis industry. For more news on Indoor Harvest Corp (OTCMKTS: INQD) and other fast-moving penny stocks, please subscribe to OracleDispatch.com now.