Nevada legalized medical marijuana in 2001, enabling patients to grow a maximum of 12 cannabis plants at home, but the first dispensary in Southern Nevada selling medical marijuana to the public opened just this month with the passing of Senate Bill 374. The bill clears the way for up to 66 dispensaries and 200 production facilities to operate in the Silver State under the direction of the Department of Health and Human Services.
Euphoria Wellness plans to open its doors in the booming Las Vegas market after receiving a green light from DigiPath Inc.’s (OTCQB: DIGP) DigiPath Labs subsidiary, which conducted extensive quality assurance testing on the first batch of cannabis harvested from its supplier –Alternative Medicine Association. The state-of-the-art cannabis laboratory is one of the first in the state to provide services and ensures compliance with state-mandated guidelines.
“This is a huge milestone for patients in Las Vegas and the rest of Southern Nevada,” said DigiPath CEO Todd Denkin in a press release announcing the opening. “We have been gearing up for this day for well over a year, and we are staffed and equipped to be able to provide cannabis testing services for not only the region, but the entire state.”
DigiPath Labs aims to ensure that products produced and sold within the state meet a high safety standard and comply with the state’s strict regulatory requirements.
“Standards are seamlessly integrated into our lives – and for very good reasons,” said DigiPath Labs CSO Dr. Cindy Orser, Ph.D. “When you take a 350mg aspirin, you can be confident it won’t contain 600mg or might not contain any aspirin at all. You don’t have to worry it might contain mercury, pesticides, or mold. We need that kind of reliability in marijuana products, especially those intended for patients.”
Analysts believe Nevada’s medical marijuana market could be worth anywhere from tens of millions to more than $100 million in size. While there are only about 10,000 registered patients right now, the state’s reciprocity rules mean that out-of-state visitors with medical marijuana permits would have access to its dispensaries. This could create an enormous market overnight, particularly in tourist destinations like Las Vegas.
The market could grow even larger if the state legalizes recreational cannabis in the upcoming general election in November 2016. After collecting a sufficient number of signatures, the measure will appear on the ballot for voters to decide. Liquor distributors – promised an early stake in the industry – contributed some $87,500 to support the measure, with analysts predicting that the industry could be enormous given the draw of Las Vegas.
Investors looking to capitalize on this opportunity have several options when it comes to publicly traded companies in the space.
Cannabics Pharmaceuticals Inc. (OTCQB: CNBX) recently announced its intention to expand the sale of its WanaCapsRX capsules into Nevada, although these capsules target a strictly medical audience. Meanwhile, Surna Inc. (OTCQB: SRNA) could provide exposure to the growing side of the business with its $1.1 million tech contract with indoor cannabis grower CWNevada, which is one of the largest indoor cultivation facilities in Las Vegas. Anything Technologies Media Inc.’s (OTC: EXMT) Frontier Indoor Garden Solutions acquisition could also provide some exposure.
However, GreenWave Advisors Founder Matthew Karnes views the cannabis testing industry as “the most attractive subsector of the industry”, adding that the market could be worth upwards of $850 million over the coming years. DigiPath is well positioned to capture value within this segment as one of the first cannabis testing laboratories in Nevada, while its plans to expand nationwide could further generate long-term shareholder value.
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