Signal Bay Inc (OTCMKTS:SGBY) shares took flight on Tuesday in a big way, ripping over 37% higher on a huge surge in volume. The primary catalyst driving the action was clear: SGBY just announced it has executed a long-term lease to provide its accredited analytical testing services to the Southern California Cannabis Marketplace. With a strong penetration into the California marketplace, one has to expect such an announcement from this company. However, the market looks as though it was caught by surprise.
CEO Mr. William Waldrop stated, “Today marks the next step in our progress to expand our mission of promoting clean cannabis across the United States and Southern California is the indisputably the largest addressable cannabis markets in the world. According to Frontier Financial, the California cannabis market is estimated to be $6.46 billion by the year 2020 and we have secured our new flagship cannabis testing facility in the epicenter.”
Signal Bay Inc (OTCMKTS:SGBY) casts itself as a company that provides advisory, management, and analytical testing services to the legalized cannabis industry in the United States.
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SGBY 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, SGBY provides Cannabis Consultant Marketplace, an outsourcing freelancing matching platform to enable cannabis companies to post projects and hire consultants.
Further, SGBY 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.
As discussed above, SGBY has a clear foothold on operations in California for analytical testing services supporting the legal marijuana market. With California recently voting to legalize pot on a recreational basis, the company’s announcement of a contractual deal with the Southern California Cannabis Marketplace shouldn’t come as a true shocker.
According to the release, SGBY operates state-of-the-art testing facilities and offers accredited testing methodologies that verify the safety and potency 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 continued, “Our new facility located in Costa Mesa, CA is strategically positioned located to become our hub lab for all of Southern California. Conveniently located by the two major freeways, this facility will be the primary processing center for all of our spoke labs from San Diego, Inland Empire, San Bernardino and Los Angeles. Last November, Costa Mesa residents approved council-sponsored ballot Measure X which allowed for licensed companies to perform cannabis extraction, product manufacturing, distribution and most importantly testing.”
Recent action has seen 27% tacked on to share pricing for the company in the past week, a bounce that has taken root amid largely bearish action over the larger time frame. That said, SGBY is a stock whose past is littered with sudden rips. Moreover, the listing has registered increased average transaction volume recently, with the past month seeing 91% beyond its prior sustained average level.
Currently trading at a market capitalization of $23.01M, SGBY has a store ($265K) of cash on the books, which must be weighed relative to about $763K in total current liabilities. One should also note that debt has been growing over recent quarters. SGBY is pulling in trailing 12-month revenues of $1.8M. In addition, the company is seeing major top line growth, with y/y quarterly revenues growing at 696.1%. You can bet we will update this one again as new information comes into view. For continuing coverage on shares of $SGBY stock, as well as our other hot stock picks, sign up for our free newsletter today and get our next hot stock pick!
Disclosure: we hold no position in $SGBY, either long or short, and we have not been compensated for this article.