Nevada is now on board with Oregon, Colorado, Washington and Alaska with marijuana legal for both medical and recreational uses. California is up next, with recreational cannabis coming at the start of 2018, creating a market that easily could exceed that of the other five states combined. Market analysts at Frontier Financial forecast the California cannabis market to reach $6.5 billion within two years of the legalization of recreational marijuana.
Signal Bay, Inc. (OTCQB:SGBY) is not overlooking the opportunity, on Tuesday morning saying that it executed a long-term lease for a new cannabis testing facility in Costa Mesa, California. The Oregon-based life sciences company operates through three subsidiaries centered on the burgeoning legal marijuana industry, including EVIO Labs, which offers accredited testing services to ensure quality and safety of cannabis through its state-of-the-art facilities.
Given the expected onslaught of demand next year, there is a very real possibility of a supply/demand imbalance in California and, even more importantly for Signal Bay, testing services to standardize products and protect consumers.
By selecting Costa Mesa, Signal Bay strategically positioned itself adjacent to highways that provide access to major Southern California markets, like Los Angeles and San Diego. Signal Bay CEO William Waldrop says the facility will serve as his company's "hub lab" and primary processing center for their other labs throughout the southern part of the state.
New marijuana business was ushered in last November when the residents of Costa Mesa voted for Measure X, making Costa Mesa the only city in Orange County to allow manufacturing and testing of marijuana products.
Shares of Signal Bay had slid to touch a penny each for the first time since last September earlier this month, but are rebounding in Tuesday trading action, surging 29.1% to 1.42 cents on news of the hub lab.
Even with the gain, shares are still well off their 52-week high at 5.5 cents printed last November.
