FluroTech’s CompleTest™ Makes Cannabis Testing More Accessible
February 14th, 2019
Exclusive, News, Top Story
The market for cannabis testing is projected to be $300 million in Canada, $750 million in the United States, and $2.75 billion worldwide. Despite the market size and tremendous need, most cannabis testing solutions are both expensive and unreliable. Cultivators struggle to optimize yields and contain infestations, while consumers have faced recalls for both contamination and mislabeling on a regular basis.
FluroTech Ltd. (TSX-V: TEST) (OTCQB: FLURF) has developed the industry’s most affordable, accurate, portable, and easy-to-use cannabis testing device to solve these problems. After securing final certifications, the device is ready for imminent commercialization, creating an early-stage opportunity for investors.
Cannabis Testing Challenges
Traditional agriculture, food, and beverage industries must adhere to regulations governing everything from crop pesticides to language on labels. Since cannabis remains illegal in many countries, traditional governing bodies can’t exercise control over the production and sales of flower, edibles, oils, and other cannabis derivatives. These dynamics have created significant challenges for governments, cultivators, dispensaries, and consumers.
Even in federally-regulated markets, like Canada, there have been many quality control issues within the cannabis industry. Some products were contaminated with banned pesticides, heavy metals, or mold, while others were mis-labeled with the wrong cannabinoid content information. These problems put consumers at risk of falling ill and cannabis businesses at risk of damaging their brand reputation.
Most cannabis testing equipment is very expensive, making it unaffordable for small cannabis companies. For example, mass spectrometry devices cost upwards of $1 million with a three to 14 day turnaround time for results. High performance chromatography is less expensive at just $250,000 per device and has a much smaller footprint, but it still requires highly-trained operators and takes ten to 14 days to turnaround a single test result.
CompleTest™ Improves Accessibility
FluroTech’s CompleTest™ was designed from the ground up to be the most cost-effective, portable, and easy-to-use solution on the market, providing consistent results in minutes rather than days or weeks. Minimally-trained operators can simply extract a small portion of dried, ground cannabis bud, mix the sample with the test kit reagent, insert the sample into the device, and receive highly-accurate test results on a smartphone or tablet in minutes.
There are many benefits to having these testing capabilities in-house:
*Early Detection: Cultivators can immediately detect early contamination in a grow cycle, purge the grow room, and rapidly return it back to production. In addition, external cannabis supply can be tested before extraction processes.
*Optimization: Cultivators can quickly test different strategies for optimizing harvest time or product quality. For example, growers using CompleTest™ recently found that different lighting solutions improved potency by 50 percent.
It’s difficult to overstate these benefits for cultivators. In Canada, many licensed producers model a one percent increase in potency leading to an additional 80 cents per gram in selling price. A one percent increase in potency in exchange for a $20,000 capital outlay results in a payback period after just 25 kilograms of dried flower. The effect of potency on selling price is amplified even more for cultivators that are focused on extraction end markets.
FluroTech just began to commercialize CompleTest™ in early February after securing Canadian Standards Association (CSA) and Underwriters Laboratories (UL) product safety certification for North America. Prior to the certifications, the company had also showcased the device at the Lift Expo in Vancouver, where it received positive feedback from attendees that could signal early interest in sales of the device.
“We have completed the design verification, testing, and certification of CompleTest™ and are excited to launch into a high growth market,” said FluroTech VP of Business Development Gary Jones. “The CompleTest™ was unveiled to master growers and quality assurance personnel at the recent Lift Expo in Vancouver, where over 60 live demonstrations were completed demonstrating the capabilities of our device.”
The CompleTest™ generates revenue from these sources:
*CompleTest™ Unit: The actual unit sells for $18,000
*CompleTest™ Scopes: Scopes are used to test for THCA/CBDA potency, heavy metals, mold, and banned pesticides. The THCA & CBDA scopes are $6,000 as is the heavy metal scope.
*CompleTest™ Test Kit: Test kits are required for each sample cartridge, providing the necessary reagent for the process. Each test kit costs $60 to $75 with 30 to 50 required per month.
Based on the average cost of each revenue stream, the company would generate with each device sold, $50,000 in the first year and $20,000 per subsequent year per customer. These recurring, high-margin revenue streams resulting from high margin sales exceeding 200 percent in all aspects of the product line could unlock significant value for shareholders over time.
The Bottom Line
FluroTech Ltd. (TSX-V: TEST) (OTCQB: FLURF) represents a near-term opportunity to capitalize on the growing demand for affordable cannabis testing. In addition to these near-term end markets, management’s long-term plans position the company as a front-runner for saliva-based roadside testing, industrial testing, and bio-marking, all of which could add billions more in long-term market potential.
For more information, visit the company’s website
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