CANNAGROW HLDGS IN COM USD0.001 (OTCMKTS:CGRW) Is A Potentially Rewarding Punt In An Active Space

CANNAGROW HLDGS IN COM USD0.001 (OTCMKTS:CGRW) has been a wild ride as late. Before the legalization vote took place back on November 8, the company flew somewhat under the radar – under that of wider markets, that is, it's been a pretty active name among the old guard band of cannabis traders.The company is now starting to attract a bit more attention from wider markets, and the wave of speculative volume rushing into cannabis stocks on the back of the legalization ballot has served up some volatility.We're looking at the company to see if there's any long term potential, and we think there might be.Here's why.First, a quick introduction.The company bills itself as a turnkey growth and consulting company in the cannabis space. That's pretty vague, but our interpretation is this: Cannagrow connects with companies looking to grow cannabis for commercial resale in Colorado and guides these companies through the permitting, construction and operation of the facilities (greenhouses) required for growth.The company brings in revenues from a consulting stream, paid by the entity that has hired it to oversee the implementation process, and then a maintenance recurring payment related to the facilities being used.The primary asset right now is a growth facility in Colorado, for which Cannagrow oversaw development and construction earlier this year. It's the implications of this facility that underpin our bullish thesis.The site is called Buffalo Ranch Facility, and it's home to a licensed grower called Category One Botanicals, LLC. An entity called NuGro Industries is the land owner and developer at the facility. Basically, when the company oversaw this facility's construction, it acted as a sort of go-between between Category One and NuGro. The facility itself serves as a sort of proof of concept, and investors were looking at its first grow cycle as indicative of the efficacy of Cannagrow in the process. No, it won't be benefiting directly from the cycles yield (it's a third party to the growth, so it won't get a cut of any revenue or anything like that) but it had a vested interest in the grow cycle's success, and this interest is rooted in some expansion clauses built into the first house's contract.These clauses afford the company the same position on an expansion by two more houses at the same plot, and this expansion was rooted in the viability of the project, as determined by the success or failure of the first cycle.Well, the first cycle is a success, and Cannagrow just announced that One Botanicals is activating the expansion clauses, and using the former in the same role as previously. Here's what Rod Clawson, Managing Principal of Category One Botanicals, had to say about the expansion:

Now that we are entering into the final stages of the first grow cycle at the Colorado Buffalo Ranch Facility I, the need for more space and production capacity for the future has become apparent. I made the request to Mr. Janovec for the additional Greenhouses as scheduled in the sub-lease agreement; he made the calls and now NuGro Industries is coordinating to begin manufacturing and construction. Now more than ever, I see the benefit of having formed alliances with CannaGrow Holdings and NuGro Industries.

(for reference, Janovec is CannaGrow's CEO)There's a downside to all this, however, and that's the financial side of things. Basically, it's a bit of a mystery what CannaGrow is earning from these projects, and what these earnings are based on. Income is based on consulting services rendered and facility construction oversight/management recurring payments, but until the company puts out an update on its financials, which we expect to hit before the first week of December, it's tough to say how the Colorado expansion will impact forward income.The bottom line on this one is that the company's services are going to be needed going forward, and have been well received by those to-date, and we're using this to suggest some future growth potential. However, it's a bit of a murky one, and until we get some insight into financial breakdown, it's a real punt.The space is primed for punts right now, so that need not necessarily put the more risk averse traders off, but it's got to be a consideration.We will be updating our subscribers as soon as we know more. For the latest updates on CGRW, sign up below!Disclosure: We have no position in CGRW and have not been compensated for this article.