Signal Bay Inc. (OTC: SGBY), a leading provider of cannabis consulting, research, data, operations, and laboratory services, continues to expand its client base throughout the country and has recently focused their attention to Maryland and Oregon. In the past two months the company has acquired a cannabis research & testing laboratory in Bend, Oregon, executed a strategic partnership with another research & testing laboratory in Medford, Oregon, and signed three new consulting clients in Maryland in Montgomery, Frederick and Prince George’s counties.
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In this article, we’ll take a closer look at the company’s progress in signing new clients, its unique approach to these industry verticals, and the opportunity for cannabis investors to get involved in a diversified and rapidly growing company at a reasonable price.
100% Consulting Success Rate
On October 15 of this year Signal Bay announced the execution of three new consulting agreements with Maryland-based clients. Under the terms of the agreements, the company flew their team of experts from the Cannabis Consultant Marketplace to Maryland and assisted these companies to complete their business plans and licensing applications in order to open medical marijuana dispensaries, processing and cultivation facilities. Applicants will be notified in January 2016 and successful entrepreneurs will be awarded a Stage 1 license approval and will have 365 days to obtain a formal license from the state.
Since 2014, the company’s founders have a 100% success rate in securing licenses for their clients, something that sets Signal Bay apart from many other cannabis consultants. The high level of success stems from its broad network of over 500 professionals across the country that are members of its Cannabis Consultant Marketplace, which launched in July of this year By working with these professionals from across the country, the company is able to provide an unparalleled breadth of services, while maintaining deep expertise.
The consulting segment of the cannabis industry continues to produce the most explosive growth given the high demand for licensing services. According to a FY2014 Viridian Capital & Research report, consulting services were the fastest growing segment of the cannabis industry in 2014 with a 169.9% growth rate. Companies also operating in the consulting space include Chuma Holdings, Inc. (OTC: CHUM) and General Cannabis Corp. (OTC: CANN). By comparison, biotechnology companies, like Zynerba Pharmaceuticals, Inc. (NASDAQ: ZYNE) (which IPO’d earlier this year), were the second fastest growing at 84.6%.
Diversification into Lab Testing
Signal Bay has diversified recently beyond cannabis consulting into another rapidly growing segment of the cannabis industry – laboratory testing services. In late October, the company announced a Memorandum of Understanding with Smith Scientific Industries Inc. that involves a strategic investment into the Kenevir Research cannabis laboratory testing business. Established in 2013, the Oregon based laboratory is well positioned to capitalize on growing demand of testing services following the introduction of adult-use legalization on October 1st.
The strategic agreement with Kenevir Research comes shortly after the company completed the acquisition of Bend, Oregon-based Cannalytical Research in September 2015. With a history of providing state-mandated compliance testing in the medical marijuana space since May 2014, the laboratory is already generating recurring cash flows. Combined, these two deals represent geographic coverage of about two thirds of the state’s $10 million annual laboratory testing market.
According to GreenWave Advisors, a comprehensive independent research firm focused on the emerging legal cannabis industry, the cannabis lab testing market is expected to generate upwards of $850 million in revenue by 2020. GreenWave Founder Matthew Karnes also called it the “most attractive subsector of the industry.”
Signal Bay has built up a strong presence in both cannabis consulting – the fastest growing subsector in 2014, and laboratory testing – the most attractive sub-sector moving forward. With this diversified presence, the company provides investors with high-margin exposure to multiple areas of the industry that are quickly expanding. The company’s modest $5 million market cap also compares favorably to others in the industry and could be poised for continuing managed growth in 2016.
For more information, visit the company’s website at www.signalbayinc.com.