GrowGeneration (OTCQX:GRWG) has been investing sharply in growth opportunities to capitalize on increasing demand in the cannabis industry. Its working capital rose to $500 million last year from $2.8 million the previous year. GrowGen currently operates in 5 states – with 15 commercial and retail stores, and it is servicing 100’s of licensed commercial growers.
GrowGeneration plans to close few acquisitions in the first half of this year, and the company is also looking to open new stores in key U.S. markets. These markets include California, Michigan, Nevada Rhode Island, Maine, Massachusetts Oregon, and the state of Washington.
GrowGeneration’s business strategies are working. The company reported year over year sales growth of 80% last year. It is planning to generate revenue in the range of $37 million this year, substantially higher from $14.4 million in fiscal 2017.
Market reports and analyst’ forecasts suggest high double-digit compound annual revenue growth for cannabis companies over the next five years.
GrowGen management also looks bullish on their future fundamentals. “We have a robust pipeline of acquisitions, which we plan to close in the first half of the year. With revenue guidance set at $37M, we anticipate continued growth into 2018 and 2019,” CEO said during the conference call.
Its stock price has been gaining momentum over the last year. The GrowGeneration stock rose 37% in the last month alone – moving the twelve-month rally to 149%. GRGW stock trades around $5 a share at present – with the 52-week trading range of $1.50 – $20.00. GrowGeneration has the total market capitalization of $94 million.
The company’s financial numbers, business expansion strategies, and industry fundamentals are allowing it to raise significant capital to strengthen their balance sheet. It has raised $5.2 million last year through the equity offering. GrowGeneration has ended the last year with $1.2 million in cash and $7.2 million in total current assets.
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