Positive Legislative Changes to Facilitate Green Hygienics Holdings Inc.’s (GRYN) Growth in San Diego

February 4, 2019 11:53:52
  • Recent legislative changes in San Diego are likely to help Green Hygienics Holdings expand to the region, despite increased competition over cultivation land
  • Company’s innovative aeroponic growing technology requires less land while still generating higher quality crops
  • Additional federal legislative changes expected to result in an incredibly favorable business climate for hemp producers
  • The recently passed Federal Farm Bill legalizing hemp forecast to contribute to the growth of the hemp market at a CAGR of 18.4 percent from 2018 to 2022

The demand for cannabis-related real estate has increased significantly in San Diego after the recent legalization and approval of three additional industrial properties for planned marijuana production (http://nnw.fm/LkRj9). While this increases the challenge for many marijuana growers, it could give an advantage to companies such as Green Hygienics Holdings Inc. (OTC: GRYN), whose aeroponics growing system requires limited land and resources, as compared to traditional growing techniques. Green Hygienics Holdings is planning on introducing its brands to the San Diego market first, before moving on to the rest of the U.S. and, then, internationally.

The San Diego City Council has increased the number of formally approved industrial spaces for marijuana cultivation to 21. In addition, the city council has approved 19 of an allowed quota of 36 retail locations. The legislative change was approved on December 3 by absolute majority (eight to zero votes). The vote affirmed permits for marijuana cultivation facilities at a 21,210-square-foot space in the Kearny Mesa area, a 40,536-square-foot space in Mira Mesa and an 86,288-square-foot space in Otay Mesa.

The decision led to increased competition over planned marijuana production sites, with 30 applicants currently vying for the remaining 19 slots available. Early last year, San Diego had 40 available locations and more than 66 applicants. Unless the city approves additional locations, many growers will be left out of San Diego and thus lose access to a market with high potential.

The situation will primarily affect businesses that utilize traditional growing methods, which require extensive resources in terms of land, water and electricity.  This could give companies such as Green Hygienics Holdings, which is using an innovative aeroponic growing technology (the delivery of nutrients to an exposed root), a competitive advantage over other businesses, as this technology requires considerably less land.

Green Hygienics Holdings, a full-scope premium cannabis cultivation enterprise targeting the high-end medical and adult-use recreational markets and leading the way in the development of science-driven cannabis cultivation systems, has developed significant expertise in aeroponics. Its proprietary aeroponics cultivation system offers multiple advantages, including superior quality and yields as a result of growing in a controlled and protected environment, scalability, lower labor costs, lower grow area and water requirements and more.

Consequently, the company’s growing efficiency is increased, and the cost per unit is significantly reduced on a consistent basis. Green Hygienics Holdings’ current product cost per gram is under $1, while competitors cultivating a high-end indoor product have costs ranging from $2 to $4 per gram.

The approvals in San Diego are a part of a larger, nationwide initiative aimed at supporting recreational cannabis sales. The attempt was first made legal in California about two years ago, when the state approved Proposition 64. At this time, California became the fifth state to legalize recreational marijuana use, and, since then, a few others have followed in its footsteps.

The San Diego developments are indicative of a much broader adoption that’s taking place on a national scale. The 2018 Federal Farm Bill was passed by the U.S. Congress with strong bipartisan support on December 12, 2018 (http://nnw.fm/l0dH7). The $867 billion bill allocates significant subsidies to American farmers, and, even more importantly, it legalizes hemp.

This legalization is a long-awaited victory after decades of campaigning. It will classify hemp as an agricultural commodity that’s no longer included in the controlled substances list.

According to advocates, the legislative changes will contribute to a market boom. As a new supply chain develops and researchers discover new uses for cannabidiol oil (a hemp derivative), the industry is expected to become more economically viable than ever before.

Researchers suggest that the Federal Farm Bill will contribute to an 18.4 percent CAGR in the period from 2018 to 2022. The cannabidiol oil market is also expected to grow, from $390 million in 2018 to $1.3 billion in 2022 – a CAGR of 27.2 percent over the five-year period (http://nnw.fm/FlI7L). The removal of hemp from the controlled substances list is forecast to have an immediate, domino-like effect.

For more information, visit the company’s website at www.GreenHygienicsHoldings.com

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