- Alternatives to cannabis retail are vast.
- Growers have more opportunity than just providing retail products.
- In a previous article, GBLX sparked more conversation and here's why I think it could be something to pay attention to.
- There's a large market opportunity for cultivation facilities to supply government funded projects.
- Efficiency of hydroponic growing offers customers a more consistent and superior product.
GrowBLOX Sciences Inc. to Focuses on Medical Cannabis Cultivation Processes
Many of us in the US have been accustomed to the taboo surrounding marijuana for years but in 2014 the states of Washington and Colorado pushed forward to legalize use of the plant for recreational purposes in addition to the medical option that is already in place. This of course opened the doors for other states to observe and plan for the future for the simple fact that in the last fiscal year, Colorado has collected roughly $22,000,000 in cannabis related taxes and fees and during the first three months of 2014, Colorado's marijuana industry generated $12,600,000 from both the recreational and medical marijuana industries.
These results continue to favor legalized recreation and medicinal use in a major way. Of course with any new industry, companies look to take an early foothold in the areas of R & D, manufacturing, and even retail in order to become an established business within said industry. One such company has focused entirely on efficient and effective forms of cultivation. GrowBLOX Sciences, Inc (OTCQB:GBLX) is a "research and biotechnical development company setting the gold standard for manufacturing medical cannabis producing technology, as well as discovering, developing, and commercializing proprietary strains of cannabis to treat a broad range of serious medical conditions." Based on its unique technology, individual proprietary cannabis strains for treatment of specific medical ailments, and the company's four revenue drivers, GrowBLOX has the ability to become a key player in the industry.
The company's approach is to become the premier manufacturer of hydroponic medical grow chambers in order to equip strategic alliances and partnerships around the country with the ability to grow medical-grade cannabis and cannabis products in compliance with state and local laws and regulations.
According to an article in High Times, plants grown hydroponically exhibit explosive growth rates when all the factors are properly in place. The editor states that though hydro growing is less forgiving than soil, it's more rewarding when done right. There is also less risk of pests when growing hydroponically. Many pests and pathogens are brought into a grow room via the soil, which also provides a perfect place for these pests to hide and breed.
Check out this study conducted by IBIS World for more on the hydroponic industry
The GrowBLOX technology is specifically designed to produce optimal environmental growing conditions for medical cannabis cultivation. It is the first chamber of its kind with the ability to monitor and control the growth process in order to produce high-grade medicinal marijuana. The GrowBLOX hydroponic technology "allows for continuous, healthy cycles of cannabis plants to reach optimized medicinal potency during the bloom cycle. Each fully enclosed chamber physically isolates each plant to protect from the onset and spread of insect and mite infestations in the grow operation and keep harmful contaminants, such as pesticides, insecticides, and vehicle exhaust out of the medicinal plants growing inside."
The basic GrowBLOX is comprised of two growing chambers and an integrated control panel. Its modular design allows growers to customize their configuration and connect additional chambers quickly to keep up with increasing demands. According to GBLX, each GrowBLOX offers optimal space to support vertical and horizontal growth. Unlike grow tents, grow closets, and other such products on the market, the GrowBLOX's superior height and width produce plants the size of a large bush or a small tree and encourage extensive branching and budding sites to form throughout each plant. This enables each plant to produce from 1 to 1½ pounds of marijuana every eight to twelve weeks. No other product on the market is capable of achieving such an abundant yield per plant indoors.
Perpetual production is accomplished through independent operation of adjacent chambers, or they may be combined to produce larger harvests. The module measures 4′ x 4′ x 7′ and each interlocking grow module pair is 4′ x 8′ x 7′. The integrated, intelligent control system continuously monitors, manages, records, and analyzes the operation for optimal growth. Remote-access capabilities let growers make real-time adjustments while they are on the go from their smartphone or computer. The control system capabilities include:
- Adjusting the light spectrum of the LED system and lighting schedule
- Modifying temperature, water, oxygen, CO2, and nutrient levels
- Collecting data about each harvest and applying the data to analytic models in order to optimize grow times and yields
According to GrowBLOX, the system uses 90% less water than standard growing operations and energy-efficient LED lights supplemented with magnetic induction lights for optimal growth at the lowest cost. The LED system reproduces the specific wavelengths of sunlight needed to promote rapid plant growth. The LED lights are extremely efficient and last five times as long as the current standard MH and HPS lights used in conventional grow operations.
Because I'm a bit of a techie, what I feel to be more impressive is the remote monitoring service, which offers growers around-the-clock remote monitoring of their GrowBLOX control system and lifeline telephone support from an experienced in-house horticulturalist that can provide expert advice and troubleshooting assistance.
To ensure the GrowBLOX is operating optimally, the company's "GBS Professional Services" can send alerts via text, email, and telephone recommending adjustments to the internal temperature, lighting, nutrient schedules, CO2, oxygen, and pH levels thus offering a "21st Century" ability to closely monitor each crop and harvest. Moreover, the company's R&D Laboratories are able to develop and license specialized strains of medical-grade cannabis and cannabis oils for the medical consumer market as a result of its technology.
GrowBLOX 4 Revenue Drivers
The Company's four main revenue drivers include:
1. Specialized cannabis strains for treatment of ailments such as cancer, HIV, AIDS, headaches, concussions, Insomnia, stomach problems, seizures, chronic pain, glaucoma, arthritis, anorexia, depression, and more.
2. GrowBLOX will produce cannabis oil in licensed conversion labs which utilize GrowBLOX units that meet their strict operating standards. Cannabis oil is used to produce medicinal-grade products and will be sold in both retail and wholesale markets.
Keeping this in mind and seeing that GBLX is already focused on an emerging hydroponics cultivation market, the industry for cannabis oils has also begun to take hold and expands the product offering for the company. The marijuana edibles market is becoming a large up and coming market since Colorado officially legalized recreational sale of the plan. According to an April article in The Cannabist, Editor Ricardo Boca states that edibles actually make up anywhere from 20-40 percent of overall sales within the marijuana market which should bode well for GBLX when it comes to selling cannabis oil infused product. Being that the push for a "smokeless" alternative to marijuana is on the rise, GrowBLOX may have successfully identified a market segment quickly moving toward critical mass and the company has indicated that it is making its own strains of cannabis to account for a myriad of uses when it comes to medical use.
3. In-state partner/supplier networks and contractual cultivation: GrowBLOX Sciences looks to partner with in-state growers to help them cultivate cannabis that meets patients' needs. To accomplish this, GBLX will look to offer financing, licensing, grow rooms and labs equipped with GrowBLOX systems, as well as operational training and support
4. Empowering universities, medical research facilities, and clinical trial teams to grow consistent yields of cannabis by supplying them with GrowBLOX systems and their cannabis strains. The company expresses that by partnering with these entities it will lead to more reliable and accurate test outcomes, facilitate recreation of desired results, and fast-track innovation within the company as well as the industry. If you didn't think research could be a big market for a company like GBLX, you may want to think again.
Colorado has gone a step further through a bill that will spend $10 million in state money toward research. The bill reads, "The grant program shall be limited to providing for objective scientific research to ascertain the efficacy of marijuana and hemp as part of medical treatment and should not be construed as encouraging or sanctioning the social or recreational use of marijuana. The grant program shall fund observational trials and clinical trials."
So the obvious potential for providing these test facilities with the GrowBLOX technology and proprietary strains could prove to be beneficial following this latest move by none other than... the Government.
Where is GBLX Today?
Over the last several months, the company has been undergoing a transformation from the previous "Signature Exploration Company" to what it's known as today. The solidifying of its symbol change was effective April 28, 2014 and since then, GrowBLOX has seen an increase in trading volume. Though it has pulled back slightly over the last few weeks, GBLX is beginning to find increased price and volume during the previous week. Over the last 5 days, GBLX has moved from a May 19th low of $1.08 to highs this week of $1.99; an 84.3% move on a progressive increase in trading volume.
The company recently announced that it would be attending the annual Money Show in Las Vegas, NV to present details about the Company as well as industry insights regarding the advancement of the medical cannabis industry. GrowBLOX CEO Craig Ellins stated, "We are looking forward to sharing our latest developments in medical cannabis cultivation technology and news on our Company's direction."
I recently put out an article titled "Marijuana Companies: The Good And The Bad" where I cite many of the early movers within the industry as well as some of the marijuana companies to have fallen victim to an SEC halt. GBLX was and still is my top marijuana company and as with several other medical or recreational companies within the space, an early investment in the right marijuana company could result in similar returns seen during the Internet Boom. It's still very early for these emerging companies and that's where a lot of the risk comes into play, but with a sound revenue model and cultivation technology, GrowBLOX could be a company to pay attention to during this "first mover" phase in a new industry boom.
Editor's Note: This article discusses one or more securities that do not trade on a major exchange. Please be aware of the risks associated with these stocks.