Growlife Inc (OTCBB:PHOT) has seen a surge in price and volume after the Company reported revenues of $2.2M in Q1 2019, Up 216% Year-Over-Year, and Increased Gross Margins to Over 34% from 10% Last Year
On May 14 PHOT announced financial results for the quarter ending March 31, 2019, and provided an overview of recent operational highlights from that quarter. The company experienced surging growth over last year, showing a 216% increase in revenue over Q1 2018, from $708,936 to $2,244,279. Additionally, the company better positioned itself financially though increasing its gross margins from 10% in 2018 to over 34% in Q1 2019, a 218% increase.
Growlife Inc (OTCBB:PHOT) aims to become the nation’s largest cultivation service provider for cultivating organics, herbs and greens and plant-based medicines. PHOT mission is to help make their customers successful. Through a network of local representatives covering the United States and Canada, regional centers and its e-Commerce team, GrowLife provides essential goods and services including media, industry-leading hydroponics and soil, plant nutrients, and thousands more products to specialty grow operations. GrowLife is headquartered in Kirkland, Washington and was founded in 2012.
The Company primarily sells through its wholly owned subsidiary, GrowLife Hydroponics, Inc. which operates a retail store in Calgary, Alberta at suite 113-2323 32nd Ave NE, Calgary, AB T2E 6Z3, Canada selling GrowLife’s line of industry-leading hydroponics and soil, along with thousands of other brands and products that cater to cultivators of all sizes.
Growlife sells a full line of products designed and manufactured by the company’s product development division, GrowLife Innovations. The Innovations division was created to provide solutions for production inefficiencies through the development of proprietary “industry-changing” products. Products can also be purchased at ShopGrowLife.com.
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PHOT has been making one big move after another in 2018; the Company announced the opening of its flagship Canadian retail location as described above, the launch of a state-of-the-art manufacturing facility in Dallas and the development of GrowLife Cube Pro, a one-stop-shop for at-home cultivators to meet demand in rapidly expanding new markets.
The manufacturing facility in Dallas is 250,000 square-foot and is a state-of-the-art facility that will be used to manufacture current Company products as well as develop new and innovative product offerings using the latest technologies and industry practices to meet the growing demands for non-toxic and environmentally safe building materials and the development of innovative new products for the indoor cultivation and cannabis industry.
In July Growlife announced the opening ots its 2nd retail location located at 1080 Brighton Ave, Portland, Maine. The company selected this location because of its proximity to big box retailers to improve accessibility to consumers. The store carries GrowLife’s line of industry-leading hydroponics and soil, along with thousands of other brands and products that cater to cultivators of all sizes. GrowLife Hydroponics also serves as the company’s largest fulfillment center for orders placed on its e-commerce platform, ShopGrowLife.com.
In August PHOT announced it has added a new hydroponics retail outlet in Los Angeles, California that will act as the company’s West Coast e-logistics fulfillment center. The market for cannabis in California will hit $3.7 billion in 2018 alone, and that’s expected to increase to over $5 billion by 2019, according to industry research firm BDS Analytics. As the second largest city in the United States, Los Angeles is well positioned to serve as a cannabis hub for the rapidly emerging cannabis market in California and the greater West coast.
The store and fulfillment center, located at 15721 Ventura Blvd, Encino, CA 91436, has a long-standing hydroponics customer base as it was acquired through an asset purchase of intellectual property rights and lease transfer from GoGreen Hydroponics. The store has been in operation since 2009 and is ideally located right off the I-405 freeway, enabling the company to reach new retail customers in that emerging legal cannabis market.
GrowLife CEO Marco Hegyi commented on the recent quarter ending March 31, 2019:
“I could not be more excited to share the tremendous growth that GrowLife delivered in this first quarter of 2019 as shown by the increase in revenues, paired with our over 34% gross margins, compared to last year’s 8-10%,” said GrowLife CEO Marco Hegyi. “As the cannabis and hemp industries continue to experience explosive growth across the globe, GrowLife is keeping pace with this growth, which is a positive sign for our company and our future potential. This quarter’s $2,244,279 in revenue represents nearly half of the sales generated in 2018.”
“The acquisition of EZ-Clone Enterprises proved to be a strategic and successful venture, enabling our continued growth. The renowned commercial EZ-Clone product line is experiencing heavily increased demand from both the legal cannabis and hemp industries. As we look to bring further innovation in cultivation technologies to these burgeoning markets, we utilized this quarter to create a new organizational executive leadership structure that will enable the company to successfully expand further through potential future acquisitions that strategically meet our goals of expanding GrowLife’s proprietary product offering.”
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Currently trading at a $25.5 million market valuation PHOT has $135k in the treasury, significant debt and fast growing revenues reporting $2.2 million in sales for q1, 2019 a 216% increase in revenue over Q1 2018, from $708,936 to $2,244,279. PHOT is an exciting story in small caps; the Company operates in the booming cannabis sector, is now fully reporting having up-listed to the OTCBB and currently has 3 retail locations selling their line of industry-leading hydroponics. PHOT has a long history of spectacular moves when cannabis heats up, and its large shareholder base are hoping it can do it again this time around. We will be updating on PHOT when more details emerge so make sure you are subscribed to Microcapdaily so you know what’s going on with PHOT.
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Disclosure: we hold no position in PHOT either long or short and we have not been compensated for this article.