The Company's EVIO Labs are setting the standard in the growing cannabis testing market
SANTA MONICA, CA, Nov. 16, 2016 /PRNewswire/ - Despite all being legal to varying degrees in most states, and despite all common sense really, Marijuana is classified as a Schedule I substance, which is the ranking reserved for drugs with the greatest potential for abuse and with no medicinal value. A critical element of the effort to remove marijuana from its designation as Schedule 1 and its eventually legalization nationwide, will be federal standards on cannabis testing to ensure safety and quality.
"The federal government is watching the transition of cannabis in certain states from an illegal substance to a legal and regulated consumer product very closely," commented William Waldrop, CEO of Signal Bay, a Life Science company whose EVIO Labs are a leader in the growing cannabis quality control testing market. The Company currently operates five of its EVIO Labs in Oregon and California. Signal Bay plans to add 18 more EVIO Labs in California alone by the end of 2018.
"Critical to the eventual national legalization of marijuana for recreational consumer use will be the federal government's confidence that there is a strict cannabis testing architecture to ensure that cannabis is regulated, standardized, and safe like alcohol or any other consumer product. This is a responsibility that we at Signal Bay take very seriously, and we believe that we are perfectly positioned to capitalize on the growing need for cannabis quality control testing both in the states in which marijuana is now legal, and for the inevitable legalization of cannabis nationwide."
Signal Targets a $850 Million Cannabis Testing Market
The cannabis quality control testing space should be on every investor's radar. The industry is growing exponentially and is expected to reach $850 million by 2020. With a high barrier to entry, there are few leaders in this space. Signal Bay has been executing on an aggressive acquisition strategy in key states like Oregon and California, the latter of which is now the single largest legal cannabis marketplace in the world. Critical to its success is a business model that is unique in the industry, a model that mirrors Quest Diagnostics (NYSE:DGX), an industry leader in clinical laboratory services.
"It's the hub and spokes model," simplifies Waldrop. "In each state we have one centralized testing laboratory with other ancillary testing facilities in local markets statewide. The core centralized lab handles the bigger, high dollar testing functions while the smaller localized labs handle collection, sampling, and other testing services. This enables us to develop networks of testing laboratories that operate efficiently within each state."
By the end of 2016, Signal Bay is expected to have 5 of its EVIO Labs operating in total, helping more than double the Company's 2015 revenues of a little under $600,000 to over $1.4 million. By 2020, Mr. Waldrop expects the Company to be operating 30 EVIO Labs coast to coast and realizing over $45 million in annual revenues.
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