How One Cannabis Company Is Quadrupling Their Production Footprint in 2019

• Cannabis producers and sellers are scrambling to secure product and cultivation space as the substance goes mainstream in Canada and parts of the U.S. The common thinking is that demand for high-quality products will exceed supply for some time as more regions legalize medically and recreationally.
• Production potential is key, and one emerging company, Item 9 Labs, plans to quadruple their production by the end of this year, and they're planning to enter new markets through licensing and permitting in the next 12 months as well. It's a company worth following as the U.S. cannabis industry blossoms.

NEW YORK, NY / ACCESSWIRE / April 18, 2019 / It may feel slow-going, but U.S. states are slowly coming around on medical marijuana use. This market is poised to surpass USD $8.0 billion by 2024 according to a research study published by Global Market Insights, Inc., and recreational use may be hot on its heels. It's already approved at the federal level in Canada and select states, and the global cannabis market is projected at $31 billion by 2021.

This has created a hot investment trend in the U.S., where well-known cultivators are breaking the mold with blue-chip partnerships. Altria's (MO) investment in Cronos Group (CRON) was a big step for the entire industry and may help to soften this federally-regulated substance's perception.

Meanwhile the crowd of companies working to enter this space has grown. Some are being spun up out of nowhere, making it hard to know who's got a viable business in place and who doesn't. Many haven't even generated sales, but there are pockets of real growth among the many public companies entering the cannabis fray.

Item 9 Labs Has A Growing Business And May Be About To Quadruple Their Production Potential

Item 9 Labs is an Arizona-based cannabis cultivator and distributor, and they focus on high-end products for medical consumers. In the last 12 months, they've made some major expansion plans and projects known, and by the end of this year they may have quadrupled their already significant production capabilities.

Item 9 reported revenue of in the fourth quarter of 2018 of $1,017,097, about 4X their sales during the same period one year ago. That could be just the start of their revenue growth as INLB announced in March that they're about to complete a 10,000 square foot facility expansion in southern Arizona. The construction will more than DOUBLE output capacity with increased cultivation manufacturing space, plus an infusion kitchen.

More interesting is that the company also broke ground in April on a second 20,000 square foot medical cannabis cultivation and processing facility with distribution rights in Nevada. They expect this facility to be producing (and generating revenue) by the fourth quarter of 2019.

Overall, by the end of this year these two projects will quadruple the company's current facility square footage, tremendously increasing their sales potential as well.

Item 9's new CEO has extensive experience in this space, too. Sara Gullickson ran a consulting firm focused on helping other businesses identify and secure the proper permitting throughout the U.S. to run their businesses (or proposed businesses). She has unique insights into the difficulties of running a cannabis operations, and her know-how could be crucial to navigating this space as they pursue further expansions in the U.S.

The company has already said they expect to be licensed to operate in 10 regions by the end of 2019 with new permits/licenses.

The Upside Is Unknown For Cannabis Companies

Cannabis is still an emerging industry, and the markets are giving many of these companies large valuations due to the addressable market opportunity.

Tilray (TLRY) has a market capitalization of $5 billion and revenue of only $32.7 million in the last twelve months. Cronos Group (NYSE:CRON) had only $11.71 million in TTM sales yet has a market valuation of $3.5 billion. Aurora Cannabis Inc. (ACB.TO) (NYSE:ACB) is an $11 billion company with about CAD$62 million in sales. MedMen (MMNFF)(MMEN.CN) is on a buying spree and reported $29.9 million in second quarter 2019 sales with a CAD$1.8 billion market cap in Canada.

Just how big this market becomes, and how many companies wind up dominating, remains to be seen. But Item 9's growth potential could be exciting. 2019 and 2020 will be big years as they open up shop in a whole new market and take their production potential up 4X from 2018.

About One Equity Stocks

One Equity Stocks is a provider of paid-for research on publicly traded emerging growth companies. This is an advertisement. We are not a licensed broker-dealer and do not publish investment advice and remind readers that investing, especially in penny stocks, involves considerable risk. One Equity Stocks encourages all readers to carefully review the SEC filings of any issuers we cover and consult with an investment professional before making any investment decisions. One Equity Stocks is a for-profit business and is typically compensated for coverage of issuers we cover as well as other advisory work we perform. Although we always strive to be objective and present the facts, you should assume we are biased because of the financial relationship we have with companies we write about. One Equity Stocks and affiliates have had an advisory relationship with INLB since March of 2019 and may receive up to 210,000 restricted shares of INLB for various advisory services including this advertisement over the next 180 days. We also receive $15,000 cash per month from INLB. We have not sold any stock in INLB but may do so without notice in the future, and if so are unable to update this disclosure. Please contact us at [email protected] for additional information or to subscribe to our intelligence service.