Tranzbyte Corporation (OTC: ERBB) and USEI (OTC: USEI) recently announced a joint venture to develop a growing operation and dispensary in the Denver metro area. Under the terms of the agreement, USEI’s lighting solutions will be combined with Tranzbyte’s water and nutrient systems to develop a cutting-edge operation in a well known state-approved facility that has a dispensary license.

“It’s one thing to talk about our innovative products and quite another thing to ask others to believe in them,” said Tranzbyte COO Stephen Shearin. “This new venture with USEI puts our own skin in the game. We know American Green products work. We also know that USEI’s products work.”

With recreational marijuana selling for $7.00 to $8.50 per gram in Denver, the dispensary operation could generate significant revenue. Medical marijuana represents an additional market with average selling prices of around $5.60 per gram, according to data from WeedMaps. These revenues are taxed at a 7.72% rate for medical cannabis and a 13.5% for recreational cannabis.

Tranzbyte’s American Green technology takes 8% less time to harvest, generates a 22% higher yield, and generates a 19% increase in nutrients without any apparent changes in THC content, according to its website. USEI’s lighting technologies will also be incorporated to help further increase yield and shorten grow times, producing lower cost product and greater dispensary margins.

The bottleneck in the recreational market may abate over time, but the joint venture partnership hopes that its technology will provide an advantage. With over 300 licenses awarded for recreational businesses, only about 15% to 20% of them have actually received the necessary local approvals to operate. The industry could grow significantly as production scales up and more players enter the market.

Shares of USEI jumped more than 40% and shares of jumped about 1% in early trading on Thursday.

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