GrowGeneration Corp. (OTCMKTS:GRWG), which bills itself as one of the largest specialty retail hydroponic and organic gardening stores serving both commercial and home growers, has caught our eye with a recent report on its funding efforts in addition to boosted guidance for the coming year.
While the company’s hydroponic growing solutions could, in theory (as well as in practice), be applied to virtually any plant, we are most interested in its potential to impact the legal cannabis industry, which just grew by an exponential margin with the introduction of legal sales and growth of marijuana in California. Adults 21 and over may now cultivate up to 6 cannabis plants in their own homes and legally possess the flower/extracts they produce. The company’s latest round of funding should set them up to attain their corporate growth goals in 2018.
The fourteen specialty retail hydroponic and organic gardening stores presently in operation for GrowGeneration Corp. (OTCMKTS:GRWG) include 9 locations in Colorado, 2 locations in California, 2 locations in Nevada and 1 location in Washington, giving the company a presence in each of the largest legal cannabis growing markets in the country. The company has made it its mission is to own and operate GrowGeneration branded stores in all the major legalized cannabis states and they’re well on their way. The hydroponic equipment sold by the company in these stores can be used for indoor and outdoor growth, each with their own benefits and challenges.
Management estimates that roughly 1,000 hydroponic stores are in operation in the U.S. According to New Frontier Data, by 2020, the market is estimated to reach over $23 billion with a compound annual growth rate of 32%.
This week, GRWG has announced that it has completed an offering of $9.0 million in convertible notes led by Merida Capital Partners, which increased its investment by an additional $2,000,000 of new capital in the Company. Navy Capital also participated in this round of financing. The oversubscribed convertible notes had a $3.00 per share convertible price, with each $250,000 noteholder receiving 37,500 warrants to purchase the Company’s common stock.
Darren Lampert, Co-Founder and Chief Executive Officer of GrowGeneration, said “With this additional capital, the company is setting 2018 revenue guidance at over $30 million. Several acquisitions are planned to close in the 1st and 2nd quarters of 2018. The Company’s acquisition targets include hydroponic and cultivation supply operations in the New England and California markets and proprietary products for commercial growers. Merida Capital’s continued support, along with our additional institutional investors, validates the Company’s business model and its ability to attract high quality strategic capital.”
Merida Capital’s Managing Partner, Mitch Baruchowitz, added, “While Merida Capital is impressed with the acceleration of GrowGen’s organic growth and performance in 2017, we are even more excited at the sheer volume of high quality acquisition opportunities GrowGen has in the intermediate term. As one of the first investors in GrowGen, we remain confident in the incredible long-term prospects for this company.” (Source: PR Newswire)
Today was our first time mentioning GRWG here on Street Register, but based on what we’ve learned we’re certainly going to be interested in tracking its activity moving forward. Despite some looming legal challenges, the business is booming, and we’ve got no reason to suspect that is going to change anytime soon. Stay locked to Street Register for updates, and we’ll deliver important developments on GRWG as they unfold. In the meantime, if you’ve yet to sign up for our 100% free newsletter, do so now! Just enter your active email address into the box below and submit!
Disclosure: No one at Street Register has been compensated in any way for the publishing of this article, nor do we hold any position in GRWG stock, short or long.