SolisTek: A Leader in Cannabis Light with Growing Revenue
Ryan Allway
March 27th, 2017
News, Top News
The legal cannabis industry is expected to surpass $50 billion in size over the coming decade, which has created numerous opportunities for investors in the space. While some companies offer investors exposure to growing the drug, others are focused on ancillary markets that may involve less regulatory risk. Investors may want to consider adding the latter type of companies to their portfolio to diversify risk and build exposure to other parts of the industry.
In this article, we will take a look at SolisTek Inc.’s (OTCQB: SLTK) compelling products and strong financial performance last year.
Leader in Cannabis Lighting
The legal cannabis industry is expected to reach $50 billion in size by 2026, according to Cowen & Co., which has generated significant demand for growing equipment. In fact, Scotts Miracle-Gro Co. (NYSE: SMG), a $5.6 billion agricultural giant known for lawn care products, spent around a half billion dollars creating a Hawthorne Gardening Co. subsidiary to capture portions of the booming urban gardening and hydroponics market last year.
SolisTek is focused on the research, design, development, and manufacturing of advanced, energy efficient greenhouse indoor horticulture lighting and ancillary equipment within this booming market. By applying the latest advances in high efficiency lighting and controls, the company delivers highly differentiated products with clear benefits and competitive prices to greenhouse and indoor horticulture markets targeting the cannabis industry.
The company’s three differentiating technologies include:
- Ignition Control™ – A lamp ignition technology that ignites lamps one-at-a-time based on load stability rather than randomized start-up. This helps prevent surges and spikes that can overload circuit breakers while maximizing electrical efficiency.
- SenseSmart™ – A pre-ignition self-diagnostic and safety tool that checks eight different factors before attempting to power a lamp. The technology detects things like lamp compatibility issues, overheating, or defective lamps and displays an error code.
- Total Harmonic Distortion – THD is caused by putting different waveform distortions together in a power supply and can cause distorted voltages and overloaded equipment failures. The company’s technology runs at very low THD ratings versus competitors.
These technologies are incorporated into nearly 40 different products that the company sells through its website and distributors. These products include complete fixtures, digital ballasts, digital lamps, reflectors, lighting accessories, and official apparel. The products are sold in approximately 500 retail locations, as well as through a few wholesale distributors covering Canada, Spain, Australia, Germany, Italy, Austria, Czech Republic, France, and the U.K.
Strong Financial Performance
SolisTek reported record revenue that increased 25% to $7,713,456 last year driven by increased demand for hydroponics equipment. At the same time, gross profit margins increased 10% to 35%, which yielded gross profit of $2,719,036 for the year. The increased profit margins were attributed to greater operating efficiencies coupled with sales of higher margin lamp products last year compared to the year-ago period in 2014.
“We are pleased that we were able to achieve record revenues from sales in 2015 as we expect to increase revenues in 2016,” said SolisTek Inc. CEO Alan Lien in a recent press release. “We are very excited about the growth in our industry and feel that the company is well positioned to take advantage of increased demand for hydroponics equipment.”
The company anticipates that revenue will continue to rise alongside the number of states that have legalized medical or recreational cannabis. With a premium brand name, the company is well-recognized in the cannabis farming community and new entrants tend to seek out its product lines for lighting solutions. The company further intends to market and sell a new line of plant nutrients and fertilizers as a way to grow revenue within its existing customer base.
Looking Ahead
Most publicly-traded companies within the cannabis industry have negligible revenue or involve regulatory risks via the direct handling of marijuana. SolisTek Inc. (OTCQB: SLTK) represents a compelling investment opportunity given its strong revenue growth, gross profitability, and hands-off approach to the cannabis industry by supplying ancillary products rather than dealing with the actual drug.
For more information, visit the company’s website or CannabisFN’s company profile.
This article was published by CFN Enterprises Inc. (OTCQB: CNFN), owner and operator of CFN Media, the industry’s leading agency and digital financial media network dedicated to the burgeoning CBD and legal cannabis industries. Call +1 (833) 420-CNFN for more information.
About Ryan Allway
Mr. Allway has over a decade of experience in the financial markets as both a private investor and financial journalist. He has been actively involved in the cannabis industry since its inception, covering public and private companies.
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CFN Enterprises Inc. (OTCQB: CNFN) owns and operates CFN Media Group, the premier agency and financial media network reaching executives, entrepreneurs and consumers worldwide. Through its proprietary content creation, video library, and distribution via www.CannabisFN.com, CFN has built an extensive database of cannabis interest, assisting many of the world’s largest cannabis firms and CBD brands to build awareness and thrive. For more information, please visit www.cfnenterprisesinc.com.
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