Comprehensive Cannabis Lab Testing A Highly Profitable, Low
Risk Segment Of Burgeoning National Industry
With recreational marijuana legalization ballot initiatives
set for 2016 in Arizona, California and Nevada, the $2.7 billion plus U.S.
cannabis sector appears to really be heating up. Leading resource for cannabusiness
entrepreneurs and a major go-to source for real-time data on the sector,
ArcView Market Research, recently projected a 300 percent uptick nationwide to
some $10.8 billion over the next four years for the industry, which already
spiked 74 percent between 2013 and 2014. This projection by ArcView seems quite
reasonable given the rate at which other states are hungrily moving to access
the substantial tax revenues currently enjoyed by Colorado, as well as
Washington, which did roughly $250 million in sales over the last year, netting
a 72 percent higher excise tax take ($62 million) than initially projected.
One of the most attractive plays in this burgeoning sector
is the de-risked lab testing segment, where companies like DigiPath Inc.
(OTCQB: DIGP) represent a solution to the ongoing problem of cannabis products
not only routinely misrepresenting the levels of THC content they contain, but
also containing unsafe levels of carcinogenic pesticides and solvents, as well
as heavy metals, insects, microbes, mold-generated mycotoxins and other
contaminants. This segment is not forced to contend with the myriad
cultivation, product quality and consumer marketing issues faced by companies
on the medicinal and recreational consumption end of the business, which is
populated by growers, equipment providers and formulators such as Abattis
Bioceuticals (OTC: ATTBF), as well as MIP (marijuana-infused product)
developers focused on edibles, such as Nutritional High International (OTC:
SPLIF).
The Skills To Pay The Bills
There are currently only a handful of publicly traded
entrants into this vitally important segment of the cannabis market, such as
CannLabs (OTC: CANL) and Pazoo (OTC: PZOO), which provide the crucial testing
and verification services cannabis product producers and dispensaries need to
satisfy state-mandated requirements. A report out in June this year from
GreenWave Advisors indicates that only those lab businesses with the most
comprehensive testing capabilities, as well as the logistical acuity to expand
geographically, will offer investors the best opportunity.
This key factor is what makes a company like DigiPath so
interesting, given its deep bench of engineering talent and established
presence with an operational lab in Las Vegas, Nevada.
Nevada: Out In Front, First-In-Class
With one of only two labs currently operating in southern
Nevada and the completion of its first commercial tests having already
demonstrated the efficacy of the company’s raw technical capacity and
expertise, DigiPath, via its DigiPath Labs™ division, is poised to become one
of the leading providers of certified cannabis material testing services in the
state. Utilizing robust, extremely sensitive hardware from one of the most
trusted names in the diagnostics instrumentation game today, Agilent Technologies
(NYSE: A), DigiPath’s initial Nevada location boasts a very quick turnaround
time for the local industry and is able to return a fully vetted sample result
in only 48 hours.
By providing a comprehensive vetting process that checks
everything from potency and moisture content, to contaminant and other foreign
matter inspection, DigiPath Labs provides an impeccable one-stop-shop testing
solution, within a scalable architecture that can be easily built out to
additional states. And this company possesses the know-how to execute on a
nationwide growth strategy as well. DigiPath Chief Science Officer, Dr. Cindy
Orser, PhD, helms the flagship DigiPath Labs location in Nevada and will be the
tip of the spear when it comes to rolling out further standardized botanical
nutraceutical testing facilities, harnessing her more than two decades of
experience spanning both academia and private industry. Extensive time spent
managing every aspect of essential projects and liaising between several
companies, including her own Big Sky Biosystems company, and federal regulatory
agencies like the FDA, CDC and the ARC (U.S. Treasury’s Administrative Resource
Center), has prepared Dr. Orser to deliver exceptional results for DigiPath in
this endeavor.
Lab Testing Segment An Industry Sweet Spot, Nevada Is A Gold
Mine
That same report from GreenWave, which blew ArcView’s
projection out of the water by predicting $21 billion by 2020 for the U.S.
cannabis market, also has some extremely rigorous analysis of the future of the
lab testing space. GreenWave’s analysis shows that lab testing and data
analytics, an important secondary component of the segment, are on track to
approach revenues of some $866 million a year in the U.S. alone by 2020 if full
legalization occurs. The report also argues that longer-term, data analytics,
consisting of procedurally built up and highly granular profile data on the
psychoactive cannabinoids, as well as the terpenoids (which act as an
anti-inflammatory, anti-tumor, antispasmodic, appetite promotion and insomnia
fighting agent) present in various strains, may ultimately emerge as the more
lucrative element of such laboratory testing. The significance of this
information for everything from cannabis-based medicines development to rapidly
profiling strains, and enabling better decisions by consumers, cannot be
overstated.
With numerous sector operators currently rushing to open
dispensaries in Nevada, and a unique reciprocity provision on the books that
allows any one of the 42 million visitors per year drawn in by Las Vegas and
the state’s other attractions to shop freely at dispensaries in the state if
they hold a valid medical marijuana card, Nevada could be one of the biggest
winners as the sector continues to boom. In fact, NerdWallet estimated last year
that Nevada’s resident population alone could produce a market worth as much as
$100 million a year if legalization passes, and that this figure could double
under the influence of strong tailwinds from medical cannabis tourism.
More Than Meets The Eye
DigiPath isn’t just about cutting-edge digital pathology
solutions and cannabis lab testing firm. The company has established an
unbiased cannabis media operation known as TNMNews (The National Marijuana
News), dedicated to providing coverage of the economic and political, as well
as cultural and medicinal dimensions of the industry, both via terrestrial
radio stations and online through its website TNMNews.com. In concert with this
bold media initiative, DigiPath has also taken its commitment to solving
industry problems like the lack of established protocols governing cultivation
and testing best practices one step further, as they design an industry-leading
training curriculum..
As the regulatory restrictions on cannabis continue to melt
away under strong consumer sentiment regarding marijuana legalization –
illustrated by Gallup polling data that consistently shows over half of
respondents in the U.S. now favor legalization, as well as a recent poll by
Pittsburgh research firm CivicScience that showed 61 percent of respondents
somewhat or strongly support legalizing and taxing marijuana – the demand for
reliable lab testing will only continue to accelerate. DigiPath has put
together the technical requisites needed in order to capture significant market
share amid the progression of this trend and, as state regulators come to
understand the utility and importance of such comprehensive testing, the strict
quality assurances provided thereby will become of increasing value as a
selling point for legislative change.
Take a closer look at the company by visiting
www.digipath.com
Disclaimer: Except for the historical information presented
herein, matters discussed in this article contain forward-looking statements
that are subject to certain risks and uncertainties that could cause actual
results to differ materially from any future results, performance or
achievements expressed or implied by such statements. DreamTeamNetwork is not
registered with any financial or securities regulatory authority, and does not
provide nor claims to provide investment advice or recommendations to readers
of this release. For making specific investment decisions, readers should seek
their own advice and that of their own professional advisers. DreamTeamNetwork
may be compensated in the future for its corporate communications services in
the form of cash-based and or equity based compensation in the companies it
writes about, or a combination of the two.
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