Growblox Sciences Inc (OTCMKTS:GBLX) announced the opening of a subsidiary in Puerto Rico. The governor signed a new law legalizing the growth of medical cannabis. Growblox is one of the first companies to take advantage of this situation as it seeks to expand operations for production and cultivation of medical cannabis. The company has also been aiming to improve on its financial health through this expansion.
The new subsidiary is already in a commercialization agreement with the parent company to make use of its unique proprietary cultivation suite. The two companies aim to increase the production and marketing of this equipment. Growblox wants to be a leader in assisting with the global manufacturing and distribution of medical cannabis. As per the agreement, Growblox PR has been awarded the license to produce, lease and license the cultivation suite worldwide. In return Growblox PR would sell cGMP-certified raw cannabis and hemp to Growblox Sciences only.
The new subsidiary would be run by Cesar Cordero, an entrepreneur and philanthropist. In fact, the new CEO has put his own money in financing the new operations as well. In return he will own 13% interest in the company. The news has been helping the stock rise lately. Growblox’s entry into the medical marijuana industry has helped it show some movement in the market. The stock crossed its 52-week highs to reach $9 per share, after the company announced that it was getting into the marijuana business. However, lack of news regarding the developments of the company had resulted in it weakening.
Unfortunately, Growblox does not have the strong financial health needed to keep the stock near its highs. The company has $282,000 in cash, with a quarterly loss of $621,000 and no revenues. The addition of a subsidiary may add to the burden, if the company is not able to arrange the required finances.
Growblox Sciences Inc (OTCMKTS:GBLX) closed at $0.410, after losing 13.68% on May 18. The company has 34.9 million shares being traded in the market, with a 52- week range of $0.15-$3.49.