CannLabs Inc. (OTC: CANL), a leading provider of proprietary, cloud-based analytics, and scientific testing methodologies relating to cannabis, recently announced its third quarter financial results. After expanding its operations into Connecticut and Nevada, the company’s revenue jumped 175% to $474,000 due to increased testing volume, growing client demand, and state testing mandates.
“During this quarter, we saw the initial affect of industry wide market and mandated testing growth impact our business,” said CannLabs Inc. CEO Mark Mirken. “With existing and anticipated legislative mandates aimed at cannabis health and safety, our licensed technology has made our laboratory partners the premier checkpoint in the seed to sale supply chain.”
In Connecticut, the company signed multi-year contracts with two of the four licensed commercial growers in the state to have their products tested with its licensed technology. In Nevada, the company expects to secure 30% market share upon the market’s maturity, with a new laboratory utilizing its licensed technology that will become operational during the third quarter of 2015.
While net losses reached $1,126,096, the company’s capital expenditures could pay big dividends down the road given the significant market share that it’s capturing in key markets that have legalized marijuana. In Colorado alone, management expects revenue to reach a $3 to $5 million annual run rate by next year, which means that the payback period for that and future labs could be very short.
The company intends to continue growing with the support of several industry-wide growth drivers, including state mandated compliance testing, increased testing volume from existing clients, new market entrants, and education that will influence customers to seek out tested products at a higher quality level that they know and trust – quality that CannLabs delivers with its licensed technology.
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