Why Cannabis Labs Make for Compelling Investments
Thomas Mitchell
June 30th, 2015
News, Top Story
Marijuana lab testing revenue could reach $850 million by 2020, according to a new report by GreenWave Advisors, an independent investment research and advisory firm serving the burgeoning cannabis industry. Driven by state-mandated cannabis testing requirements, investors may want to take a closer look at the lab testing segment of the industry as a potential investment opportunity.
According to the report from GreenWave Advisors:
“As individual states debate the efficacy of current legislative statutes or contemplate initial legalization referendums, lab testing requirements of cannabis products has become an increasing subject of concern and attention. Although the current governing statutes regarding legalized marijuana uses vary in great degrees from state to state, one common theme that has emerged is the increased awareness on the part of legislators and health officials, as well as cultivators and laboratories, of the critical importance of product testing and quality assurance.”
Cannabis testing is a relatively new phenomenon. In fact, Colorado had no protocols in place when the state first legalized marijuana. The program was only established about a year ago when a series of overdoses on edibles made the news. Similarly, Washington State didn’t introduce its cannabis testing requirements until 2013 when recreational cannabis became legal, even though medical cannabis had been used since 1998.
DigiPath Inc. (OTCQB: DIGP) is one of the few publicly traded cannabis laboratories. With one of just two labs in Nevada, the company has already signed an agreement with a dispensary (Euphoria Wellness) to test for unsafe levels of contaminants like heavy metals, microbes, mycotoxins, pesticides, and solvents that can exacerbate health issues. Unfortunately, these dangerous chemicals have been commonplace in cannabis nationwide.
With over 400 medicinal compounds found in the cannabis plant, it’s no wonder that so many states are requiring lab testing as a critical step in the seed-to-sale process. Only eight states of the 23 that have permitted medical marijuana require testing now, but five additional states are exploring testing legislation and that number is likely to expand moving forward as more states approve the drug and realize the potential hazards that exist.
In a recent article from Smithsonian.com, Andy LaFrate of Charas Scientific, who operates one of only eight labs in Colorado said, “It’s pretty startling just how dirty a lot of this stuff is . . . There’s a stereotype, a hippy kind of mentality, that leads people to assume that growers are using natural cultivation methods and growing organically . . . That’s not necessarily the case.”
For investors, cannabis laboratories represent an opportunity to capitalize on a growing sector without all of the regulatory red tape or risk associated with “pure” marijuana plays. Unlike Cannabis Science Inc. (OTC: CBIS), which is exploring clinical compounds, Mcig Inc. (OTC: MCIG), which focuses on vaporizer products, or MedBox Inc. (OTC: MDBX), which focuses on dispensary machines, DigiPath is well-positioned to meet an immediate regulator-driven demand for testing services.
A company like DigiPath Inc. (OTCQB: DIGP) is well suited to take advantage of this growing industry with their existing lab, trusted scientific team, and experienced management professionals.
To learn more about DigiPath Inc. please visit their website at http://www.digipath.com.
Or visit CannabisFN’s profile at https://cannabisfn.com/mdc/digipath-inc/. To learn more about Digipath Labs, please visit, http://www.digipathlabs.com.
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 Thomas Mitchell
Mr. Mitchell has over a decade of experience in the financial markets as both a private investor and financial journalist.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. Emerging Growth LLC dba TDM Financial, which owns CannabisFN, 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. Emerging Growth LLC dba TDM Financial, which owns CannabisFN, may from time to time have a position in the securities mentioned herein and will increase or decrease such positions without notice. For making specific investment decisions, readers should seek their own advice and that of their own professional advisers. Emerging Growth LLC dba TDM Financial, which owns CannabisFN, may be compensated for its Services in the form of cash-based and/or equity- based compensation in the companies it writes about, or a combination of the two. For full disclosure please visit: https://www.cannabisfn.com/legal-disclaimer/.
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