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A Strong Start For Surna Inc (OTCMKTS:SRNA)

A Strong Start For Surna Inc (OTCMKTS:SRNA)
Written by
Alex Carlson
Published on
January 7, 2016
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Surna Inc (OTCMKTS:SRNA) is lighting up the OTC markets as we start the New Year. Many experts believe 2016 will be the start of another "green rush" for the marijuana industry. You can include us at Insider Financial in this camp as well. We see a number of catalysts that can propel pot stocks higher and create some of the excitement we saw back in 2014. The marijuana industry is still in its infancy and there's an awful lot of money to be made by investing with the right companies. You can include SRNA in this group.First up, driving SRNA is being located in Boulder, Colorado, the "Silicon Valley for Weed." Here in Colorado it's ground zero for the brightest, smartest and most qualified experts in the marijuana industry. SRNA likes to say that being here gives the company "the applied knowledge and experience to choose its acquisitions wisely and to give its customer base the benefit of the knowledge gained by being a true industry pioneer."Second, the marijuana industry has a lot of tailwinds heading into 2016. Roughly 14 states could legalize marijuana this year, adult-use cannabis or possibly both, either at the ballot box or through state legislatures. While it’s doubtful all those states will be successful, there’s a good chance at least a handful will legalize in 2016. No other single year has offered such incredible promise in terms of the sheer volume of states that could legalize, thanks to other pioneering marijuana markets and growing support for cannabis in general.Third, SRNA is one of the few pot stocks with a real business and real revenues. For the nine months ended Sept. 30, 2015, the Company reported gross revenues of $6,182,936 compared to $1,206,047 for the same period in 2014, an increase of 413%. Revenues for the three months ended Sept. 30, 2015 were $3,634,091, up from $1,677,950 in the previous quarter, and $859,488 in revenue during the same period in 2014. SRNA is also well-capitalized with $3.3 million in cash on its balance sheet. SRNA has been using its money wisely and investing in research and development. In the first nine months of 2015, the Company spent $533,808 in product development costs, primarily on the Surna Reflector. The Surna Reflector is Surna's first product to combine lighting and environmental control into one unit while increasing light delivery to the plant canopy.Fourth, SRNA does not produce or sell cannabis. This allows the company to avoid the hassles of banking, security and possible adverse Federal regulations. We like that SRNA is a pick and shovel type of company rather than an actual grower or producer of cannabis. In the late 1800s gold rush, it was the pick and shovel companies that served the gold miners that made all the money while many gold miners went bust. SRNA's business model centers around developing innovative technologies and products that monitor, control and or address the energy and resource intensive nature of indoor cannabis cultivation. Currently, the Company's revenue stream is based on its main product offerings - supplying industrial technology and products to commercial indoor cannabis grow facilities.Fifth, SRNA has established a reputation for innovation in the cannabis space. Most recently, SRNA won The Cannabist's inaugural award for Innovation in the cannabis industry. The Innovation Award recognizes the cannabis business that has shown the most innovation throughout the industry. Eleven finalists were named to qualify for the award. A judging panel consisting of the cannabis industry's top influencers, including members from the ArcView Group, Canopy, and WomenGrow, selected Surna as the winner. What really got us excited was CEO Stephen Keen's response to winning this award.

"Innovation has always been at the heart of Surna. It is very gratifying to know that the cannabis industry recognizes and appreciates Surna's leadership in innovation, specifically around improving energy efficiencies in cultivation facilities through our engineering services and environmental control products. I hope it goes without saying how thankful I am for the awesome employees on our team who dedicate themselves to our innovative culture. We couldn't be more excited for the start of 2016 as we have a number of innovative products queued up for the cannabis industry."

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SRNA is an exciting play in the cannabis sector. Trading at a market cap of just $10 million with real revenues, SRNA will be one of the first names to get moving when pot stocks catch fire again. Don't miss out on the latest news on SRNA, sign up below!

Disclosure: We have no position in SRNA either long or short. We have not been compensated for this article.

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