EVIO Makes Another Acquisition in Lucrative California Cannabis Market
$EVIO Eureka, CA has the distinction of being the first licensed cannabis testing facility in Humboldt County - Emerald Triangle - California
SANTA MONICA, CA / ACCESSWIRE / May 1, 2018 / California is about to undergo a paradigm shift in its cannabis industry that will create a boom for certified testing laboratories. Come the first of July, licensed retail stores can sell only lab-tested cannabis products, meaning there could be a log jam at the laboratory level to keep up with testing demand. That’s not a bad problem to have if you are a cannabis-testing lab owner like $EVIO Inc. (OTCQB: $EVIO), a company on an acquisition bender as part of a goal to end the year with 18 lab locations compared to the 9 it had at the start of the year.
The company has made two acquisitions in two weeks, one of which gives the company a lab in the cannabis-growing heartland of the U.S. and the other that taps into the burgeoning Canadian cannabis market. On Monday, EVIO said it acquired 100 percent of Leaf Detective, a lab specializing in analytical laboratory testing for medical marijuana dispensaries, cannabis manufacturers, producers and consumers. The buyout marks EVIO’s second location in the state after previously acquiring a lab in Berkeley, CA.
Leaf Detective is located in Eureka, California, about 300 miles northwest of Sacramento and 350 miles southwest of EVIO’s headquarters in Bend, Oregon. Leaf has the distinction of being the first licensed cannabis testing facility in Humboldt County. Humboldt County is part of what is referred to as the “Emerald Triangle,” the largest cannabis-producing region in the U.S.
As a holder of one of only 28 licenses issued by the Bureau of Cannabis Control of testing facilities, Leaf Detective – and now EVIO – finds itself in an enviable position surrounded by cultivators that in two months will by law be required to have their product tested for safety.
EVIO is making the acquisition for total consideration of $500,000 via a convertible promissory note, convertible at $1.25 per share.
Keeping with EVIO’s theme of only the highest caliber labs in their portfolio, CEO William Waldrop said, “The Leaf Detective lab will undergo upgrades to meet new testing standards. The improved facility is expected to be operational during the third quarter.” Each of EVIO’s nine labs has either already received accreditation or is currently in the process to receive the distinction.
BDS Analytics estimates that cannabis sales in California will reach $3.7 billion in 2018 and rise to $5.1 billion in 2019. With conservative estimates that the analytic testing lab market will run at about 5 percent of sales, EVIO is looking to get a piece of a market that should be valued more than $250 million in California alone next year.
EVIO two weeks ago expanded outside the U.S., setting up EVIO Canada and taking a 50 percent interest in privately-owned Keystone Labs, an independent contract-testing laboratory specializing in quality testing for regulated industries located in Edmonton, Alberta. As Canada is staring at full adult-use legalization of cannabis in the coming months, EVIO is positioned to collect market share by taking the stake in one of only three laboratories in Canada that holds both a Dealer’s License and a GMP Drug Establishment License for cannabis testing.
EVIO is relentless in its pursuit to build value and grow sales, which Singular Research pegs at $10.0 million for EVIO next year. Singular last week initiated coverage on EVIO with a “buy” rating and a $2.00 price target.
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