Indoor Harvest Corp (OTCMKTS:INQD)'s Latest Deal Should Drive Value

Indoor Harvest Corp (OTCMKTS:INQD) scored a decent run up at the start of this trading week, with more than 280K shares trading hands – it's highest volume since mid November and around 80K or so above the the month trailing daily average. During the subsequent session, however, the company gave some of the run back to the market, and currently sits a few percentage points down on its volume spike price. What caused the spike in volume in? How does whatever caused the spike affect the company longer term? Finally, in light of the answers to the first two questions, is this an opportunity to get in on a pullback?Let's take a look.Indoor Harvest Corp is basically an architecture firm for grow houses. That simplifies the business model a little, but it's probably the best way to describe it. The company designs grow houses, with a specific focus on the hydroponic grow house space, and charges its clients for this designing. There's a little more to it than that, however. It's team, and specifically its Chief Innovation Officer, a guy called Chad Sykes, in a hydroponic technology expert, and incorporates all sorts of innovative technology into the houses they design and create. This is the company's USP.The latter, Sykes, stood down from CEO to his CIO position late last year, and the guy who was basically the head of business development, and also a co founder with Sykes, John Choo, took over as CEO. We saw this as a pivotal move, and one that should drive growth going forward.At that time, the company had just announced the falling through of a deal that would have seen the Indoor Harvest spin off its cannabis related offerings to an entity called Head North LLC. Since then, and this is the latest announcement, a fresh deal has come to the fore, with a Texas based entity called Alamo CBD.The deal is pretty convoluted, but basically, Indoor Harvest will acquire Alamo, and current Alamo shareholders will own 60% of the combined entity, while Indoor Harvest shareholders will own 40%. Further, Indoor Harvest will spin-off its vertical farming operations including its produce and engineering, procurement and construction related operations to Indoor Harvest shareholders at the closing of the acquisition.The question is, how will this spin off affect shareholders? It's essentially a way to separate the cannabis operations from everything else, but that's where we see the growth coming from. There's a business model planned that will see the Alamo/Indoor Harvest team set up a JV with a company called Vyripharm, and under this JV, Alamo will provide the core material (grown using Indoor Harvest technology and facilities) for Vyripharm to use in some in development cannabis pharmaceuticals.So long as Indoor Harvest structures this arrangement in a way that Indoor Harvest's current shareholders don't just end up with an exposure to the legacy business, and not the forward cannabis enterprise, there's plenty of potential upside here. Company material hasn’t necessarily suggested the former, but its wording is a bit misleading nonetheless.Regardless, we still like this one. The cannabis space is hotter than ever, and we're now entering a phase whereby the industry wide correction that followed the post-ballot buzz is turning around, and companies with a solid claim to the sector are starting to pick up strength.Indoor Harvest is one that has these ties, and as mentioned, as long as it can give its shareholders a fair chunk of its new pharmaceutical supply operation, said shareholders should be privy to some decent near term gains as the acquisition/joint venture matures. Having said that, We're looking for some more clarification on the numbers for shareholders before we get too attached.We will be updating our subscribers as soon as we know more. For the latest updates on INQD, sign up below!Disclosure: We have no position in INQD and have not been compensated for this article.