Digipath Takes Over Management & Signs Letter of Intent to Acquire Majority Control of Steep Hill’s Licensed Northern California Lab from Evio Labs
Acquisition Would Extend Multi-State Operator (MSO) Strategy
Digipath, Inc. (OTCQB: DIGP) (the “Company”), a service-oriented independent analytical testing laboratory and data company focused on the cannabis and hemp markets, announced today that it has signed a letter of intent to acquire a controlling interest in a Berkeley, CA based cannabis and hemp testing laboratory from EVIO, Inc. (OTC PINK:EVIO) in exchange for shares of Digipath’s common stock.
The lab acquisition would immediately make Digipath a Multi-State Operator (MSO) and would be the Company’s first in what it hopes will be similar future purchases wherein the Company acquires existing labs and increases profitability using Digipath’s proven methodology and business model.
The Berkeley lab is fully licensed in California with state-of-the art equipment and complete redundancy. Digipath is already managing the lab under a management agreement pending the closing of the transaction. Based on current projections, the Berkeley lab is expected to more than double revenue of the next calendar year. California is widely regarded as one of the leading cannabis markets in the world and its residents as the third largest consumers of cannabis in the world. California has instituted strict regulations requiring all cannabis products to receive a Certificate of Analysis from a state-licensed testing lab prior to distribution. This has been a boon for the cannabis testing market in California, making it the fastest growing segment within the cannabis industry.
Over 100 Certified Analytical Testing Labs are needed to meet California’s current demand according to California’s Bureau of Cannabis Control (BCC). There is a severe shortage of qualified testing facilities with only 35 such certified labs operating in California currently.
“The acquisition of this laboratory would accelerate implementation of our strategy to become a multi-state operator (MSO) of cannabis and hemp testing labs,” stated Todd Denkin, Digipath Founder and President. “California has followed Nevada and other states by mandating strict testing guidelines for cannabis and related products. With only 35 cannabis testing labs in California to service the thousands of licensees, this is a tremendous expansion opportunity for Digipath and its shareholders.” Denkin added, “To learn more about this acquisition, please join me this Wednesday December 8th, at 9:00 am EST at the Emerging Growth Conference Webinar by simply clicking here to register.”
“With cannabis products now legal for recreational use in 11 states and for medical use in 35 states we believe that the vast market for testing and analysis has hit its tipping point. There are significant barriers to entry to becoming a state-licensed and certified testing lab. Digipath intends to fill this void, having established itself as a premium testing laboratory brand in Nevada and now has firm plans to do the same in California,” said Stone Douglass, Chief Financial Officer, Digipath. “This is a first step in executing our plan to become a leading national brand in cannabis and hemp testing.”
“We are elated to expand and extend our relationship with Digipath,” said Arielle Chu, VP of Licensing at Steep Hill. “To date, this has been a fruitful and mutually beneficial engagement and we fully expect both companies to profit from the association as we move forward together.”
About Digipath, Inc. (OTCQB: DIGP)
Digipath, Inc., supports the cannabis industry’s best practices for reliable testing, data acquisition, formulations, and new canna-tech to the cannabis industry.
Digipath Labs provides pharmaceutical-grade analysis and testing to the cannabis industry to ensure producers, consumers and patients know exactly what is in the cannabis they ingest and to help maximize the quality of its client’s products through analysis, research, development, and standardization.
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