Greengro Technologies Inc (OTCMKTS:GRNH): A Breakout Is Brewing

The future of the regulated cannabis industry belongs to innovative companies that serve fastest-growing sectors with high barriers to entry for newcomers. Greengro Technologies Inc (OTCMKTS:GRNH) is one of the companies with bright prospects in the expanding regulated cannabis industry because of its proprietary technologies and a team of successful personnel.In our last coverage of GRNH, we looked at the moves the company was making to capture the billions of dollars in revenue in regulated cannabis industry. In today’s piece, we continue to examine GRNH’s moves so you could see why this is an exciting small cap.But before we get into the details, examine GRNH’s price action below. GRNH Daily ChartBusinessFor the sake of our readers not familiar with GRNH, we’ll revisit the company’s business model.GRNH is a provider of world-class ecofriendly cultivation systems for both indoor and outdoor use. The company boasts specific domain expertise in this area. The company’s agricultural science systems are used in consumer and commercial farming setups – which implies a large addressable market for its solutions. GRNH’s customers range from restaurants to community gardens to large-scale commercial farming companies.GRNH posted record 2Q17 revenue of $925,000, a sharp increase from $175,000 in the prior quarter. But these are tiny figures compared to GRNH’s revenue potential.According to Arcview Market Research, North American regulated cannabis sales were $6.7 billion in 2016 and the market is projected to exceed $20 billion by 2021. This implies that the North American regulated cannabis industry is set to grow at an average rate of 25% per year over the next five years.Some regulated cannabis market surveys are more bullish. For example, researchers at investment bank Cowen and Co forecast that the US regulated cannabis industry could be worth more than $50 billion by 2026.Regulated cannabis market is expanding not just in the US but globally as well. Cannabis is legal in one way or another in Canada, Mexico, Brazil, Germany and Australia. Canada is on the verge of expanding its cannabis market with an expected legalization of cannabis for adults or recreational use by July next year.With regions that have legalized cannabis recording tax revenue increases and more employment opportunities, push for expanded cannabis legalization continues to gather pace.Recent developmentsOn September 13, GRNH announced a shift in its business strategy as it positions itself to capitalize on the expanding regulated cannabis market. The strategic shift means that GRNH now plays in the cannabis breeding and cloning sector – which is shaping up to be one of the fastest-growing and most lucrative sectors of the regulated cannabis industry partly because of the high barriers to entry for newcomers.In cannabis breeding and cloning, GRNH will develop high-quality cannabis strains, especially those with optimal levels of cannabinoids such as cannabidiol (CBD). GRNH has already won a cannabis breeding and cloning contract. KGBI Colorado, a leading retailer and cultivator of medical marijuana, contracted Geno breeding, a subsidiary of GRNH, to build and operate a modern medical marijuana breeding and cloning laboratory in Denver, Colorado.GRNH is relying on its unique technologies and a team of successful geneticists to give it an edge in the cannabis breeding and cloning sector – where it sees an enormous growth opportunity.As regulated cannabis expands, so does competition. This is leading savvy growers, producers and dispensaries to seek innovative solutions to enable them stand out from the competition. As such, cannabis breeding and branding are some of the sectors seeing rapid innovation and growth. So GRNH’s move into cannabis breeding and cloning is a step in the right direction.GRNH’s business model enables it to generate revenue in a variety of ways without being significantly exposed to cannabis cultivation or retailing risks. The company on September 27 announced that it had completed construction of its flagship igot420-branded marijuana dispensary in North Hollywood, California. What is important to note about GRNH’s igot420 dispensaries business model is that besides the company making money through leases, it also generates revenue through management contracts.Commenting about the flagship igot420 dispensary in North Hollywood, James Haas, the CEO of GRNH, stated:

“The completion of our flagship igot420-branded marijuana dispensary and grow represents one of the greatest milestones in the Company’s history. Not only are we about to launch one of the largest dispensaries across all of Los Angeles, at nearly 14,000 square feet but, more importantly, it will represent one of the most efficient and profitable dispensaries in the market due to utilization advanced indoor gro systems.”

Source:GRNH is underway with the construction of its second igot420 dispensary facility in California.ConclusionGRNH has traded downward for the most part since the beginning of the year. But the shift in the business strategy and the stream of positive news we’ve seen from GRNH should make more investors aware of the company’s prospects and cause the stock to move higher.We will be updating our subscribers as soon as we know more. For the latest updates on GRNH, sign up below!Disclosure: We have no position in GRNH and have not been compensated for this article.