Cannabis testing lab operator EVIO Inc. (OTCQB: EVIO) disclosed Monday morning that it has acquired 100 percent of privately-owned Leaf Detective, LLC, a specialist in analytical laboratory testing for medical marijuana dispensaries, cannabis manufacturers, producers and consumers.
Headquartered in Eureka, in northern California, Leaf Detective is the first licensed cannabis testing facility in Humboldt County.
The little company is the holder of one of only 28 licenses issued by California’s Bureau of Cannabis Control to testing facilities. Come July 1, California law mandates that all cannabis products are lab tested for safety, spawning predictions that there will be an immediate shortage of laboratories to conduct all the requisite analyses.
Eureka is a part of the "Emerald Triangle," the largest cannabis-producing region in the U.S., giving the lab unprecedented exposure to cultivators that will need their product tested.
With the advent of recreational cannabis in California as of the start of 2018, BDS Analytics forecasts that cannabis sales in the state will climb to $3.7 billion this year and $5.1 billion in 2019.
EVIO already has a lab in Berkeley, California. The Bend, Oregon-based company has nine operating labs across five states and recently expanded into Canada via acquisition of a 50% stake in Edmonton-based Keystone Labs. EVIO says it plans to keep up the torrid acquisition pace as part of a plan to have 18 labs in its portfolio by the end of the year.
Once the acquisition of Leaf Detective is complete, EVIO’s CEO William Waldrop says the facility will be upgraded to meet new testing standards. All of EVIO’s labs are accredited or in the process of accreditation. The plan is for the improved lab to be operational by the end of the third quarter, according to Waldrop.
Shares of EVIO moved ahead 2.8% in Monday trading to $1.49. At $1.49, shares were up 9.6% in 2018.
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