[ACCESSWIRE]
ORLANDO, FL / ACCESSWIRE / February 14, 2019 / GSRX Industries (OTCQB: GSRX) surprised the market in January, raising fourth quarter guidance to $2.0 million, up from its previously issued range of $1.0 million to $1.4 million.
The company's growing network of cannabis dispensaries (it operates six across Puerto Rico and California) has been a major driver behind its growth. Achieving its increased guidance target would mean GSRX grew revenue 185% over its already impressive third quarter performance.
"We are seeing great sales at our six dispensaries, and our recently launched Hemp-based Pure and Natural CBD products line is also seeing strong demand," said GSRX CEO Les Ball. "In addition, we anticipate opening three additional dispensaries in Puerto Rico during the first quarter."
Average daily sales across GSRX retail dispensaries rose to $26,211 during the current quarter-to-date, an increase of 49% over fourth quarter 2018 ($17,612.) and an increase of 271% over third quarter 2018 ($7,065). Given the dramatic rise in sales, management adjusted its first quarter performance expectations upward, anticipating revenues of $2.6 million to $2.7 million for the quarter.
''It pays to be vertical''
That's according to Curaleaf Holdings' (CURLF) Joseph Lusardi, who made the comment at Benzinga's Cannabis Capital Conference in January. Lusardi is CEO of one of the largest multistate operators in the space, a $2 billion giant holding licenses in 11 states, and he has played a key role in the company's massive growth over the past two years.
While dispensaries have played a major role in GSRX's recent growth, it represents just one segment of this growing enterprise.
GSRX management made a series of joint ventures and investments in California last year, including a majority stake in an established manufacturer of cannabinoid (CBD) products, Spirulinex.
Spirulinex has developed an all-natural, patent-pending method of suspending cannabinoids in water to create aqueous solutions, thereby eliminating the need for oils, butter, or synthetic lipids.
This proprietary method enables GSRX to develop and offer products in which cannabinoids are scientifically dosed for consistency and quality assurance.
Commenting on the deal, CEO Les Ball stated, ''With our majority stake in Spirulinex, GSRX has now added a major link of the rapidly growing cannabis product supply chain to the Company's portfolio of businesses.''
Another key link in the development of its vertically-integrated operation was announced last February, when GSRX entered a joint venture with the well-known Bay Area grow brand, Sunset Connect.
Sunset Connect produces top-shelf indoor flowers and a portfolio of branded extractions, including crumble, shatter, wax, and rosin. Its products are available in dispensaries and delivery services throughout the region.
Expanded cultivation space post-deal positions the operation well for a strong 2019.
Strong Competitive Advantages
With its deals with Spirulinex and Sunset Connect, GSRX got more than exciting operations. It also got a talented team with a wealth of experience, something not easily duplicated.
Founded by a biochemist and a master grower, Spirulinex has successfully developed the only plant-based THC and CBD suspension and powdered product in California.
Spirulinex's head of extraction is a multiple Cannabis Cup winner and works closely with the company's Chief Scientist in developing formulations and extractions. Together they ensure consistent dosing and ideal user experience for customers.
Commenting on the future of the industry, Curaleaf's Lusardi said, ''Bioavailability is going to become more important in order to differentiate products and effects and meet the needs of a broader consumer base.'' He went on to add that precision dosing and lesser-known cannabinoids are also topics of discussion in terms of the future of the industry.
CBD - A Rapidly Evolving, Multi-Billion-Dollar Opportunity
Beyond its growing operations in medical and recreational cannabis markets, GSRX is also quickly moving into the CBD market under its new Pure and Natural brand, which has generated healthy sales since its e-commerce site went live in January, and its first bricks-and-mortar location opened in Nashville in February.
As with its partnerships in California, Pure and Natural is best-in-class.
According to a deal announced earlier this year, ''We made a rigorous search for a partner to supply a line of CBD products that are pure, organic, and which are worthy complements to our business,'' said Cooper Ansett, Zen Stop Co-Founder. ''In Pure and Natural, we found a brand that offers a broad range of pharmaceutical-grade CBD products that are manufactured to exacting standards and which provide both excellent quality and ease in dosing.''
Zen Stop is one of the fastest growing revolutionary wellness businesses. Zen Stop plans to provide a broad selection of Pure and Natural pharmaceutical-grade, certified-naturally organic, full spectrum CBD products, including capsules, tinctures/oils, salve, energy drink packets, vape pens, skin care and both dog and cat pet products. In addition, Pure and Natural will offer its patent-pending Spirulinex CBD Dragon Glass product via Zen Stop.
CBD Sales Set to Go Mainstream with Farm Bill Passage
The 2018 Farm Bill, signed into law by President Trump in late December, is expected to catapult the nascent but booming $1 billion CBD market into mainstream acceptance and multi-billion-dollars in sales.
"The passing of the Farm Bill is transformational for the industry, allowing for the national cultivation, production, distribution, and marketing of hemp-derived products in the United States," stated Hess Moallem, President and CEO of Charlotte's Web, a leader in hemp-derived CBD products.
Mile High Labs CFO Jon Hilley said, ''We're talking to big global brands now to implement CBD into their products but are underestimating how quick this market will develop."
Although consumers have been able to purchase CBD products in the 47 states where CBD sales are permitted, legality at the federal level has kept major retailers and other key players away.
But times have changed, and many in the medical community and in the public say that CBD can be helpful for certain health conditions. Most notably, it has clearly been proved to help reduce the number of seizures in people who suffer from two devastating forms of epilepsy. The FDA approved the CBD-based drug Epidiolex in mid-2018.
Now with the passing of the Farm Bill and the legalization of industrial hemp production, experts expect the CBD market to expand rapidly.
"The passing of the farm bill will most certainly open up the marketplace for hemp products, specifically hemp extracts that are high in CBD," says Josh Hendrix, the director of domestic product business development for the cannabis company CV Science. ''It will provide a higher comfort level for retailers and consumers and will lead to more investment and opportunity in the industry as it will continue to see rapid expansion."
According to cannabis industry analysts the Brightfield Group, the hemp-derived CBD market could hit $22 billion by 2022.
Low Valuations, Despite Potential
Now is the time to focus on cannabis growth and expansion in the U.S., according to Sean Stiefel, portfolio manager at Navy Capital.
''The [valuations] are way too low," he said. ''Your mom, sisters, and brothers will be able to name brands by later this year."
We believe GSRX is one of the stocks that has yet to realize its fair valuation, based on both current performance and future expectations.
With exciting deals underway, a commanding presence in the Puerto Rican market, a growing foothold in the massive California market, and the beginning of a CBD segment set to take off in 2019, GSRX is one of the best bargains in the space at current levels.
To learn more about GSRX, view their latest investor presentation, filed with the SEC in January: https://www.sec.gov/Archives/edgar/data/1381240/000149315219000710/ex99-1.htm
About RedChip Companies, Inc.
RedChip Companies, an Inc. 5000 company, is an international investor relations, media, and research firm focused on microcap and small-cap companies. For 27 years, RedChip has delivered concrete, measurable results for its clients. Our newsletter, the RedChip Money Report is delivered online weekly to 60,000 investors. RedChip has developed the most comprehensive service platform in the industry for microcap and small-cap companies. These services include the following: a worldwide distribution network for its stock research; retail and institutional roadshows in major U.S. cities; outbound marketing to stock brokers, RIAs, institutions, and family offices; a digital media investor relations platform that has generated over 2.3 million unique investor views; quarterly global online institutional and retail investor conferences that reach over 10,000 investors annually, a globally-televised show, "The RedChip Money Report,'' which airs in 149 million homes globally on Bloomberg International; TV commercials in local and national markets; corporate and product videos; website design; and traditional investor relation services, which include press release writing, development of investor presentations, quarterly conference call script writing, strategic consulting, capital raising, and more.
To learn more about RedChip's products and services, please visit:
https://www.redchip.com/corporate/investor_relations
"Discovering Tomorrow's Blue Chips Today"™
Disclaimer: RedChip Companies, Inc. research reports, company profiles and other investor relations materials, publications or presentations, including web content, are based on data obtained from sources we believe to be reliable but are not guaranteed as to accuracy and are not purported to be complete. As such, the information should not be construed as advice designed to meet the particular investment needs of any investor. Any opinions expressed in RedChip reports, company profiles, or other investor relations materials and presentations are subject to change. RedChip Companies and its affiliates may buy and sell shares of securities or options of the issuers mentioned on this website at any time.
The information contained herein is not intended to be used as the basis for investment decisions and should not be construed as advice intended to meet the particular investment needs of any investor. The information contained herein is not a representation or warranty and is not an offer or solicitation of an offer to buy or sell any security. To the fullest extent of the law, RedChip Companies, Inc., our specialists, advisors, and partners will not be liable to any person or entity for the quality, accuracy, completeness, reliability or timeliness of the information provided, or for any direct, indirect, consequential, incidental, special or punitive damages that may arise out of the use of information provided to any person or entity (including but not limited to lost profits, loss of opportunities, trading losses and damages that may result from any inaccuracy or incompleteness of this information).
Stock market investing is inherently risky. RedChip Companies is not responsible for any gains or losses that result from the opinions expressed on this website, in its research reports, company profiles or in other investor relations materials or presentations that it publishes electronically or in print.
We strongly encourage all investors to conduct their own research before making any investment decision. For more information on stock market investing, visit the Securities and Exchange Commission ("SEC") at www.sec.gov.
GSRX Industries (OTCQB: GSRX) is a client of RedChip Companies. RedChip Companies, Inc. received 1,000,000 registered shares of GSRX for consulting services and 50,000 shares for investor awareness services. Be advised RedChip intends to sell some or all of its shares at any time, including when you are buying.
Investor awareness services and programs are designed to help small-cap companies communicate their investment characteristics. RedChip investor awareness services include the preparation of a research profile(s), multimedia marketing, and other awareness services.
Contact:
Craig Brelsford
RedChip Companies
[email protected]
407-644-4256
SOURCE: RedChip
