All indicators are pointing to beginning of something big brewing in the marijuana industry.
Specifically, in extracts.
This isn’t some research report by a big brokerage firm written from an office tower in the heart of a city.
In this case, it’s from the head of an extracts company.
Kiran Sidhu, CEO of Halo Labs (CAN:HALO / US:AGEEF), recently did a brief interview with SmallCapPower.com.
Naturally, you’ll find some lamenting about how the company is undervalued relative to its peers.
Of course, we except that.
If you’ve ever sat in investor road shows of companies, even incomprehensibly overvalued companies like Tesla will say the same thing in those meetings.
No CEO who ever wanted to keep their jobs said the stock was reasonably valued.
So, we won’t fault him for that.
Instead, we want to focus on the state of the marijuana industry segment Halo Labs is in and what it is seeing.
Halo Labs is on the front lines of the U.S. marijuana extraction market.
The company has operations in California, Nevada, and Oregon and has grown a customer base of 50,000.
It can see firsthand the level of demand for extract services and products.
Sidhu summed up the situation in extracts when said demand for marijuana oil extracts in California is “off the charts.”
It’s a great example of how strong demand is in the marijuana extracts business.
Better yet, it’s backed up by data too. Halo Labs monthly sales have doubled in just five months. Halo report October 2018 revenue of $1.23 million. By February 2019 revenue surged to $2.6 million.
This confirms a lot of reports we’re seeing elsewhere.
Extracts are the hottest segment in the marijuana industry right now and it’s only going to go higher.
As the industry matures and consumers start really going for extract-containing products including vapes, edibles, and beverages.
Sidhu confirms that extracts are the “fastest growing segment overall” in the marijuana industry.
But here’s the outstanding part of this for investors looking for the best buys in the marijuana stock sector today.
Sidhu mentioned that Halo Labs was “capacity constrained.”
In other words, the demand is there, the supply is not.
When demand outstrips supply, suppliers are the place to be.
Although this supply/demand imbalance won’t last forever, it’s going to be a big driver of for marijuana extraction companies in 2019.
As a result of this, marijuana extraction companies (and those with large extraction operations) are going to be in prime position in the short run and the long run considering the long-term growth potential in extract-containing products.