| Found a Winner in the Cannabis Sector, Item 9 Labs (INLB) Looks Too Good to Ignore with Rapid Growth, Recurring Revenues, Trading at a Value, Under the Radar
Trading significantly under book value with a low price/sales ratio.
Good day everyone,
Item 9 Labs Corp. (OTCQX: INLB) is a vertically integrated canna-bis operator and dispensary franchisor delivering premium products from its large-scale cultivation and production facilities.
Current price $.27/share (as of market close 11-11-22)
INLB has been growing like a weed. Anyone with interest in an investment in the canna-bis sector should look at INLB due to their unique, highly profitable model versus other canna-bis companies:
High revenue growth – Unique franchise model – Currently priced below book value – Gross margin of 38% – Award winning product line – Total vertical integration. INLB is trading at 33% of their (mrq) book value of $.81/share.
INLB is an innovator in the new generation of canna-bis growers and distributors.
2019 revenues $4.9M
2020 revenues $8.1M
2021 revenues $21.9M
2022 (9 months) $17.6M (9 months ended 6-30-22)
Analysts covering INLB have estimated FYE 2022 (September 30) revenues at $23.25M and FYE 2023 revenues at $30M.
The current market cap for INLB is only $26M
Is the canna-bis market still hot? Legal sales of canna-bis in the U.S. grew 40% in 2021 to $25 billion, according to research from BofA Securities. The total U.S. economic impact from canna-bis sales is expected to reach $160 billion in 2025.
Headquartered in Arizona, the company is currently expanding its operations space by 650,000+ square feet on its 50-acre site, one of the largest properties in Arizona zoned to grow and cultivate canna-bis flower. The company is also in active development of a 20,000 square foot cultivation and lab facility in Pahrump, Nevada projected to be fully operational by the end of 2022.
INLB is a totally vertical canna-bis operation, they grow quality canna-bis leaves, and create retail products in their processing labs. INLB provides its award-winning canna-bis products to 60% of the dispensaries (estimated at 125 total) located in Arizona.
INLB is a leader in franchising canna-bis dispensaries with their Unity Rd. brand. They have helped entrepreneurs open over 300 of them.
INLB generates revenue from the sale of their award-winning canna-bis products and from the $100,000 license fee for a franchise and 7% of gross sales paid to them by franchisees. Those charges are not untypical in the world of franchised operations.
Like many other business opportunities for individuals to own their own business, franchising in the canna-bis sector is fast becoming the way to go. The entry into owning a canna-bis dispensary can be fraught with hurdles such as regulatory compliance, steady supply of quality products, a poor business model and many more.
Fast food is an example. Many entrepreneurs rush to open a store front with a unique name selling pizza, or burgers, or any other kinds of foods they feel they can make better than the competition. Ultimately, and sadly, more than half of them go out of business too soon. But the franchised fast-food storefronts seem to go on forever. When’s the last time you noticed that a McDonalds franchise went out of business? INLB is a member of the International Franchise Association (IFA).
So, along with selling their home-grown and lab developed canna-bis products throughout the state of Arizona, INLB has those monthly recurring revenues coming in from all their Unity Rd. Brand franchisees.
Recent events at INLB:
The company earned more than 30 podium finishes at Arizona marijuana competitions for product excellence across their high-quality cannabis flower, pre-roll, concentrate and vape products. The competition was held October 22-23.
In August the company announced that their Unity Rd. brand had opened four canna-bis retail stores throughout Colorado, Oklahoma and South Dakota and that a pending Canadian retail (Sessions Canna-bis) acquisition would put INLB on track to become one of the world’s largest canna-bis retail franchisors.
INLB CEO, Andrew Bowden said, “Our highly scalable retail model offers local entrepreneurs expert guidance and a roadmap to operating compliantly in canna-bis. On a corporate level, we can rapidly expand our Unity Rd. dispensary footprint with low capital expenditure since franchisees own and operate their locations.”
INLB Statistics:
FYE is September 30th – MRQ is June 30, 2022
Outstanding shares 96.2M
Float 76.7M shares
Insider ownership 30.9%
Book value (mrq) $.81/share
Revenues (ttm) $23.8M
Market cap $26M
Having just crossed the SMA 20 of $.25 I believe INLB shares could quickly move past their SMA 50 of $.34 on their way to the August high of $.97/share indicating a potential upside of 350%
About Item 9 Labs Corp.
Item 9 Labs Corp. is a vertically integrated canna-bis operator and dispensary franchisor delivering premium products from its large-scale cultivation and production facilities in the United States. The award-winning Item 9 Labs brand specializes in best-in-class products and user experience across several canna-bis categories. The company also offers a unique dispensary franchise model through the national Unity Rd. retail brand. Easing barriers to entry, the franchise provides an opportunity for both new and existing dispensary owners to leverage the knowledge, resources, and ongoing support needed to thrive in their state compliantly and successfully. Item 9 Labs brings the best industry practices to markets nationwide through distinctive retail experience, cultivation capabilities, and product innovation. The veteran management team combines a diverse skill set with deep experience in the canna-bis sector, franchising, and the capital markets to lead a new generation of public canna-bis companies that provide transparency, consistency, and well-being.
Stay tuned for our updated coverage coming soon,
The Traders News Group |
