Our goal of becoming the nation’s largest cultivation facility service
provider for the production of organics, herbs and greens and plant-based medicines
continues to guide our decisions. Our mission is to best serve more cultivators
in the design, build-out, expansion and maintenance of their facilities with
products of high quality, exceptional value and competitive price. Through knowledgeable
representatives, regional centers and its e-commerce website, GrowLife provides
essential and hard-to-find goods including growing media, industry-leading hydroponics
equipment, organic plant nutrients, and thousands more products to specialty
grow operations across the United States.
We primarily sell through our wholly owned subsidiary, GrowLife Hydroponics,
Inc. GrowLife companies distribute and sell over 15,000 products through its
e-commerce distribution channel, GrowLifeEco.com, and through our regional retail
storefronts. GrowLife and its business units are organized and directed to operate
strictly in accordance with all applicable state and federal laws.
We are focusing on future success. In that regard, we believe that the hydroponics
supply industry will experience significant growth and, as a result, operating
in this industry has become highly competitive, cash intensive and customer
centric. However, we have plans to address these challenges.
First, the opportunity to sell both infrastructure equipment and recurring supplies
to the indoor cultivation industry is constantly increasing as demand for indoor
cultivation grows across the United States. GrowLife believes the demand will
continue to grow and more and more states and municipalities, including California
enact rules and regulations allowing for more indoor cultivation activities.
GrowLife continues with its multi-faceted distribution strategy, which we believe
serves customers in the following manner: Direct sales to large commercial customers,
retail in some markets for local convenience, and e-commerce via GrowLifeEco.com
to fulfill orders across the nation from customers of all sizes.
While there is a great deal of purchasing of indoor cultivation equipment for
non-Cannabis cultivation, many of our investors have a high-interest in the
direction of the Cannabis industry as it may directly affect GrowLife’s
growth. Therefore, the following market information is provided.
Twenty eight states and the District of Columbia currently have laws legalizing
marijuana in some form. Three other states will soon join them after recently
passing measures permitting use of medical marijuana.
Seven states and the District of Columbia have adopted more expansive laws legalizing
marijuana for recreational use. Most recently, California, Massachusetts, Maine
and Nevada all passed measures in November legalizing recreational marijuana.
California’s Prop. 64 measure allows adults 21 and older to possess up
to one ounce of marijuana and grow up to six plants in their homes. Other tax
and licensing provisions of the law will not take effect until January 2018.
Several legislatures in states recently passing legalization measures are debating
regulatory proposals around the use and sale of marijuana. Massachusetts lawmakers
are weighing bills that would lower the amount that residents can legally possess
or place restrictions on retails stores. In Nevada, one proposal calls for businesses
to obtain permits allowing for the public use of marijuana.
A number of states have also decriminalized the possession of small amounts
of marijuana. Other states have passed medical marijuana laws allowing for limited
use of cannabis. Some medical marijuana laws are broader than others, with types
of medical conditions that allow for treatment varying from state to state.
Others states (not shown on the map below) have passed laws allowing residents
to possess cannabis oil if they suffer from certain medical illnesses.
Our long-term strategy revolves around three premises: First, the indoor growing
market for fruits, vegetables and medical plants is here to stay. We see an
opportunity for it to double for several years, especially after last year’s
election raising the number of states that support Cannabis; Second, GrowLife
will continue to establish itself as a national brand to provide the much-needed
advisory services and sell lighting, nutrients, mediums and other equipment,
supplies and services to cultivators across the country; And third, the demand
for more healthy, safer and economical ways to run indoor growing operations
will dramatically increase and require innovative products to intelligently
drive down costs without compromising quality. These are critical premises for
the Company’s growth.
