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Sunday, October 25, 2020

Signal Bay Inc (OTCMKTS:SGBY) Catalysts in Play

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Signal Bay Inc (OTCMKTS:SGBY) is a stock we covered a couple weeks ago. At the time, we made a bullish case because the company was aggressively expanding in California and Oregon, with acquisitions coming in a wave.

Since we are talking about a massive growth market (marijuana in Oregon and California – it doesn’t get much steeper where growth curves are concerned), this feels like an open and shut case: you don’t fade this. Oregon just went live with legal sales of recreational marijuana and California is likely going to join them in a month. SGBY just announced that all three of its new EVIO labs are now licensed and prepared to handle what is being billed as a “bumper crop harvest” coming online now in Oregon.

Signal Bay Inc (OTCMKTS:SGBY) bills itself as a company that provides advisory, management, and analytical testing services to the legalized cannabis industry in the United States.

The company offers industry research; business and market intelligence; and advisory and consulting services, including license application support, regulatory compliance, market forecasts, and operational insights.

It also publishes industry information through online media, research reports, and publications; and operates CANNAiQ.com, a business to business information portal, as well as MarijuanaMath.com, a general interest informational Website.

In addition, the company provides Cannabis Consultant Marketplace, an outsourcing freelancing matching platform to enable cannabis companies to post projects and hire consultants.

Further, it provides operating services; and operates CR Labs, Inc., which offers analytical testing services, such as residual solvent analysis, pesticide screening, microbiological screening, terpene analysis, and cannabinoid potency profiling of cannabis and cannabis-infused products to growers, processors, and dispensaries.

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The big new announcement from the Company came on Monday:

CEO William Waldrop stated, “All three of our labs, EVIO Labs Bend, EVIO Labs Eugene and Kenevir Research are now licensed by the OLCC. Collectively, we provide all of the tests required by the state, and have begun collecting samples in accordance with Oregon’s new sampling rules.”

As noted above, the Oregon recreational marijuana market went live last weekend. We are going to see business booming for companies like SGBY as bales of cannabis are trucked in for market.

Mr. Waldrop also said, “We are now scheduling appointments with new and existing clients and fielding a myriad of customer questions. The industry is going through a learning curve as producers, processors and retailers transition to the new requirements. It is our goal to be a consultative partner and educate our customers through the transition. We are moving from an environment of here’s my sample, can you test it for me to one of rigorous statistical sampling, extensive quality controls and documentation including new state reporting. During this transition, we feel that our strict adherence to the new reporting requirements combined with our educational support will help to ensure integrity and a level of trust with our growing customer base.”

Mr. Waldrop went on to say, “Our entire team has been thoroughly trained on the new requirements. Two changes that are most visible to our clients both require more extensive testing. For instance, rather than performing one test per harvest lot, we must now test for every ten pounds of flower in a lot. Also many processors and edible manufacturers will undergo a biannual process validation. This is a series of tests that ensures consistent manufacturing methods. In absence of this validation, which itself involves 20 tests, product manufacturers are subject to more tests per lot than they have performed in the past.”

Signal Bay operates state-of-the-art testing facilities and offers accredited testing methodologies performed by a qualified team of scientists to ensure the safety and quality of the nation’s cannabis supply. As the legalization of medical and recreational marijuana continues across the country, demand for reliable cannabis testing facilities is increasing.

Mr. Waldrop finished up with, “These are exciting times for our company and we are growing at a rapid pace. I want to take the time to thank our entire team for their efforts in helping us to meet recent milestones. With regard to our growth rate, our Portland acquisition is being finalized and we will have more information on that topic in the coming days.”

Currently trading at a market capitalization of $13.3M, SGBY has an extremely small store of cash on the books, in a pool of total assets approaching $2.2M, which is balanced by an appreciable load ($1.50M) of total accumulated debt. But the top line is at $500k already, and growing at a phenomenal 1,700% clip, y/y on a quarterly basis. With catalysts stacking up, the stock continues to look like an exciting story. For continuing coverage on $SGBY and our other hot stock picks, sign up for our free newsletter today and get our next hot stock pick!

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