That’s according to Curaleaf Holdings’ (OTC: CURLF) Joseph Lusardi, who made the comment at Benzinga’s Cannabis Capital Conference last week. Lusardi is CEO of one of the largest multistate operators in the space, a $2 billion giant holding licenses in 11 states, and Lusardi has played a key role in the company’s massive growth over the past two years.

 

While dispensaries have played a major role in GSRX’s recent growth, it represents just one segment of this growing enterprise.

 

GSRX management made a series of joint ventures and investments in California last year, including a majority stake in an established manufacturer of cannabinoid (CBD) products, Spirulinex.

 

Spirulinex has developed an all-natural, patent-pending method of suspending cannabinoids in water to create aqueous solutions, thereby eliminating the need for oils, butter, or synthetic lipids.

 

This proprietary method enables GSRX to develop and offer products in which cannabinoids are scientifically dosed for consistency and quality assurance.

 

Commenting on the deal, CEO Les Ball stated, “With our majority stake in Spirulinex, GSRX has now added a major link of the rapidly growing cannabis product supply chain to the Company’s portfolio of businesses.”

 

Another key link in the development of its vertically-integrated operation was announced in February, when GSRX entered a joint venture with the well-known Bay Area grow brand, Sunset Connect.

 

Sunset Connect produces top-shelf indoor flowers and a portfolio of branded extractions, including crumble, shatter, wax, and rosin. Its products are available in dispensaries and delivery services throughout the region.

 

Expanded cultivation space post-deal positions the operation well for a strong 2019.

 

Strong Competitive Advantages

 

With its deals with Spirulinex and Sunset Connect, GSRX got more than exciting operations. It also got a talented team with a wealth of experience, something not easily duplicated.

 

Founded by a biochemist and a master grower, Spirulinex has successfully developed the only plant-based THC and CBD suspension and powdered product in California.

 

Spirulinex’s head of extraction is a multiple Cannabis Cup winner and works closely with the company’s Chief Scientist in developing formulations and extractions. Together they ensure consistent dosing and ideal user experience for customers.

 

Commenting on the future of the industry, Curaleaf’s Lusardi said, “Bioavailability is going to become more important in order to differentiate products and effects and meet the needs of a broader consumer base.” He went on to add that precision dosing and lesser-known cannabinoids are also topics of discussion in terms of the future of the industry.

 

CBD – A Rapidly Evolving, Multi-Billion-Dollar Opportunity

 

Beyond its growing operations in medical and recreational cannabis markets, GSRX is also quickly moving into the CBD market under its new Pure and Natural brand.

 

As with its partnerships in California, Pure and Natural is best-in-class.

 

According to a deal announced this week, “We made a rigorous search for a partner to supply a line of CBD products that are pure, organic, and which are worthy complements to our business,” said Cooper Ansett, Zen Stop Co-Founder. “In Pure and Natural, we found a brand that offers a broad range of pharmaceutical-grade CBD products that are manufactured to exacting standards and which provide both excellent quality and ease in dosing.”

 

Zen Stop is one of the fastest growing revolutionary wellness businesses. Zen Stop will provide a broad selection of Pure and Natural pharmaceutical-grade, certified-naturally organic, full spectrum CBD products, including capsules, tinctures/oils, salve, energy drink packets, vape pens, skin care and both dog and cat pet products. In addition, Pure and Natural will offer its patent-pending Spirulinex CBD Dragon Glass product via Zen Stop.

 

CBD Sales Set to Go Mainstream with Farm Bill Passage

 

The 2018 Farm Bill, signed into law by President Trump in late December, is expected to catapult the nascent but booming $1 billion CBD market into mainstream acceptance and multi-billion-dollars in sales.

 

"The passing of the Farm Bill is transformational for the industry, allowing for the national cultivation, production, distribution, and marketing of hemp-derived products in the United States," stated Hess Moallem, President and CEO of Charlotte's Web, a leader in hemp-derived CBD products.

 

Mile High Labs CFO Jon Hilley said, “We’re talking to big global brands now to implement CBD into their products but are underestimating how quick this market will develop."

 

Although consumers have been able to purchase CBD products in the 47 states where CBD sales are permitted, legality at the federal level has kept major retailers and other key players away.

 

But times have changed, and many in the medical community and in the public say that CBD can be helpful for certain health conditions. Most notably, it has clearly been proved to help reduce the number of seizures in people who suffer from two devastating forms of epilepsy. The FDA approved the CBD-based drug Epidiolex in mid-2018.

 

Now with the passing of the Farm Bill and the legalization of industrial-hemp production, experts expect the CBD market to expand rapidly.

 

"The passing of the farm bill will most certainly open up the marketplace for hemp products, specifically hemp extracts that are high in CBD," says Josh Hendrix, the director of domestic product business development for the cannabis company CV Science. “It will provide a higher comfort level for retailers and consumers and will lead to more investment and opportunity in the industry as it will continue to see rapid expansion."

 

According to cannabis industry analysts the Brightfield Group, the hemp-derived CBD market could hit $22 billion by 2022.

 

Low Valuations, Despite Potential

 

Now is the time to focus on cannabis growth and expansion in the U.S., according to Sean Stiefel, portfolio manager at Navy Capital.

 

“The [valuations] are way too low," he said. “Your mom, sisters, and brothers will be able to name brands by later this year."

 

We believe GSRX is one of the stocks that has yet to realize its fair valuation, based on both current performance and future expectations.

 

With exciting deals underway, a commanding presence in the Puerto Rican market, a growing foothold in the massive California market, and the beginning of a CBD segment set to take off in 2019, GSRX is one of the best bargains in the space at current levels.

 

To learn more about GSRX, view their latest investor presentation, filed with the SEC just last week: https://www.sec.gov/Archives/edgar/data/ 1381240/ 000149315219000710/ex99-1.htm

 

Disclosure

GSRX Industries (OTCQB: GSRX) is a client of RedChip Companies. RedChip Companies, Inc. received 1,000,000 registered shares of GSRX for consulting services and 50,000 shares for investor awareness services. Be advised RedChip intends to sell some or all of its shares at any time, including when you are buying.