Most of the time when someone says "hindsight is 20/20", it's said with a hint of regret or lamentation - having access to more information would have been helpful, given the outcome. In the case of Growlife Inc. (OTCBB:PHOT), however, the fact that hindsight is a 20/20 affair confirms something exciting that was already being alluded to. That exciting something for PHOT and shareholders? The organization is on the verge of a major expansion.
Those familiar with PHOT will say the clues started to materialize back on July 18th when the company hired Randy Breitman to fill the newly-created position of Director of Business Development. The "new hire" theme was underscored yesterday when Growlife named John Genisi as the new CFO. Both gentlemen are tops in their respective arenas, and should provide the corporation with outstanding service. Those aren't the first glimmers of a serious expansion for the company, however.
No, the growth wave actually started way back on June 26th, when Growlife Inc. told us it was opening a new retail store in New Hampshire. With six hydroponic and growing equipment stores already up and running, the one in New Hampshire would be the seventh. It would be the first truly organically grown store that PHOT would open, however. The six existing ones were stores in place before the company M&A's itself into the company we know today. Much like a Lay's potato chip though, we probably should have known that "no one can eat just one" (or in the case of a retailer, no one can grow by just one - many more are apt to be on the way). Sure enough...
New Hampshire isn't the only new store opening on the radar. As it turns out, per today's announcement there are 29 more store openings on the long-term radar, with a dozen or so of them likely to be opened within the next year and a half. That should approximately triple the current annual sales figure of $8 million, to $24 million; Growlife's stores tend to generate just a little over a million in annual revenues.
Critics might be quick to suggest this is the "aha" moment for investors who had been faithful and optimistic up until now. This expansion - which will likely come through a combination of acquisitions and organic openings - will cost money, which is potentially dilutive to current shareholders. And truth be told, no matter how PHOT decides to raise those needed funds, it's going to work against the existing shareholder base. This is one of these cases, however, where the upside easily more than outweighs the drawbacks. The nationwide pro-marijuana movement is in place, and Growlife's Urban Garden, Rocky Mountain Hydroponics, and Evergreen Garden Center stores are big hits where they're currently located. Investors aren't going to have to wait long to get a nice return on that investment.
Bottom line: Hindsight is 20/20, but for PHOT, that's a very exciting view. It's going to be even more exciting when traders apply hindsight at this point in 2014, and look at just how much Growlife Inc. accomplished in the last half of 2013 and the first half of the coming year. The stock's very likely to reflect that growth too.
For more updates and insights on Growlife and the marijuana industry, sign up for the free SmallCap Network newsletter today. You'll get picks, market calls, and more.
No comments:
Post a Comment