A 500-Foot View of Growlife Inc (OTCMKTS:PHOT)

A 500-Foot View of Growlife Inc (OTCMKTS:PHOT)


Growlife Inc (OTCMKTS:PHOT) shot up +20% on Monday and continues to build momentum in the New Year. This cannabis penny stockk is hanging out on our watch list for good reason. PHOT has not returned to the highs of last week, but the stock is still at it 6-month high and ditto for its 52-week high. PHOT sets up nicely in the cannabis space because of its portfolio, so let’s take a closer look.

In late November, PHOT said that they had opened a retail outlet for the sale of cannabis located in Calgary, Alberta, Canada. This move is expected to put PHOT in a better financial situation – which I will detail more later. Overall, PHOT will open up shop but also ensure that there are staff and experts in these facilities who will educate customers on efficient growing practices. The latter is meant to ensure that PHOT meets its motto of helping their customers become successful. More recently, PHOT launched a new all-in-one home cultivation system called the GrowLife Cube Pro which adds to their already large inventory of products. The system which is an improvement to the GrowLife Cube comes to fill the demand for home-based cultivation which has been driven by regulation in some states. Furthermore, with more people wanting to cultivate some of their crops at home, as we addressed in a previous article.

Growlife Inc (OTCMKTS:PHOT) provides goods, including media (farming soil), hydroponics equipment, organic plant nutrients, and various other products to specialty grow operations across the United States. The Company primarily sells through its subsidiary, GrowLife Hydroponics, Inc. In addition to the promotion and sales of GrowLife owned brands, GrowLife distributes and sells over 3,000 products through its e-commerce distribution channel, Greners.com, and through its regional retail storefronts. The Company serves a community of commercial and urban cultivators growing specialty crops, including organics, greens, and plant-based medicines. Indoor growing techniques are used to cultivate plant-based medicines. The Company holds rights in approximately 30 Website addresses related to its business, such as www.growlifeinc.com, www.growlifeeco.com, www.stealthgrow.com and www.greners.com.

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On the financial side, PHOT experienced increased revenues in the third quarter of 2017 with their revenues rising from $521,000 in 2Q2017 to $661,000 in 3Q2017. Yet, their net loss fell to over $756,000 from a loss of $247,000. Furthermore, their working capital position and operating cash flows also stood at a deficit of $2.87 million and $227,000 respectively in 3Q2017. These numbers cause some concern and if PHOT wants to really be around for the long haul, they are going to have to be more financially prudent going forward. The cannabis market in California this year could do $5B and Canada is expected to follow with similar numbers, so they need to have their ducks lined up.

Growlife Inc (OTCMKTS:PHOT) is holding a market cap of $74.57M and has 2.16B shares out. PHOT is still in a speculative place because they are unproven regarding what level of sales they can generate, but the opening up on California might push them in the “buy” category.  For more news on PHOT and other fast-moving penny stocks, please subscribe to OracleDispatch.com.

Disclosure: we hold no position in $PHOT, either long or short, and we have not been compensated for this article.

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