The cannabis sector has been under pressure and this pullback has created a great opportunity for cannabis investors. When you look back to the same time period last year, it looks likes cannabis stocks are following a similar trend and we are closely monitoring the recent weakness.

When it comes to investing in cannabis stocks, it is important for investors to focus on companies that are led by a management team with a proven track record, that are executing on previously announced initiatives, and that are attractively valued.

Cannabis Lab Testing: An Emerging Opportunity

Although many cannabis investors are focused on growers and distributors, we continue to believe that there is significant opportunity on the ancillary side of the industry. One of the sectors we have been favorable on is the cannabis lab testing industry and we expect this to develop into a major opportunity over the next year.

The cannabis lab testing industry is poised to benefit from the increased demand for legal marijuana. As new markets open and existing markets expand, demand for testing services will only increase and we are favorable on this opportunity.

One company positioned to capitalize on the cannabis lab testing market is EVIO, Inc. (EVIO), a life science company that provides accredited analytical testing services and scientific research to the regulated cannabis industry. We have been monitoring EVIO since its inception and are favorable on the company’s position within the cannabis lab testing market.

California: A Major Growth Driver for EVIO

Earlier this year, EVIO expanded its reach and acquired 60% of C3 Labs (has the option to purchase the remaining 40%), which received its temporary testing license from California. We are favorable on this move as C3 will operate under the brand EVIO Labs Berkeley and view it as a transformative acquisition as EVIO continues to focus on increasing market share in California.

C3 Labs will serve licensed California cannabis businesses in accordance with the rules set forth by the Bureau of Cannabis Control. EVIO plans for its 8,000 square foot facility to serve as the Northern California hub laboratory and expects to start to service the California market anytime now.

We are favorable on this development and expect to see this become a significant asset for EVIO. Demand for testing services has seen sharp growth following the legalization of recreational marijuana in California.

Continues to Expand and Enter New Markets

Over the last year, EVIO has been nothing short of an execution story and it has been following through on its announcements. We are favorable on the continued execution and EVIO has expanded its reach and entered the California, Colorado, Florida, and Massachusetts market. These markets represent significant opportunities for EVIO and we are monitoring how the company continues to execute.

EVIO recently strengthened its balance sheets and plans to use the capital to enter new markets throughout the United States in those states where medical marijuana is legal. We are favorable on the company’s position within the California market and view this a major long-term growth driver for the company.

We are favorable on entrance into new markets and these developments are in-line with EVIO’s growth strategy. The California, Colorado, Florida, and Massachusetts marijuana markets are attractive due to their growth potential and diverse geographic location. As demand for legal marijuana continues to increase, EVIO will benefit from the increased need for testing services.

An Undervalued Opportunity

We are favorable on EVIO’s U.S. expansion strategy and continue to monitor the shares as the company continues to execute on their strategy. The lab testing industry is expected to see incremental growth over the next few years and EVIO plans to capitalize on this growth by creating a coast-to-coast footprint in the United States.

EVIO has come well off its recent highs and we remain bullish on it’s long-term outlook. With a market cap that is less than $18 million, we continue to see significant upside to current levels. Cannabis lab testing is becoming big business and we are favorable on EVIO’s position within this market.

Cannabis investors looking for an attractive value proposition should take a look at EVIO. We expect the cannabis lab testing company to record strong growth over the next year as it continues to ramp up testing services.