Growblox Sciences Inc. (OTCMKTS:GBLX) Bouncing On Permit News
On Tuesday Growblox Sciences Inc. (OTCMKTS:GBLX) finally turned the tide, managing to bounce on the news that it had acquired a county permit for the cultivation of marijuana.
The company has had a stroke of good fortune lately. It recently managed to secure a dispensary permit, and now, through its subsidiary GBS NEVADA LLC, it has acquired two more approvals by Clark County – for a cultivation and for a conversion facility. Announcing the news was more than enough to boost GBLX‘s position on the market, pushing the ticker 14.29% up yesterday alone. The way things are going, it looks like the company’s on its way to recover its previous price high, but how long will this last?
As with Terra Tech Corp. (OTCMKTS:TRTC), it should be noted that although this securing said permits is certainly a necessary step forward for GBLX, it is a relatively small one. All in all the news is good, but when considered carefully, it is definitely nothing perceptive investors should go crazy over. After all, in order to proceed with its plan the company needs to get a State approval as well. GBLX mentioned that it’s “a matter of weeks” before it applies for a State business license, but in actual point of fact, state hearings will not happen until August.
Moreover, investors can’t really be sure that the Nevada state commission will be as generous in handing out cultivation permissions as the Clark County commission, who hardly turned anyone down. It is very likely that the Nevada State commission will be much stricter. Investors would do well to consider the very real possibility that GBLX may not be approved on a state level. What will happen to the company then?
Furthermore, even if the company manages to secure a state approval and begins growing marijuana immediately after that, it would still take some time for investors to see clear results. The $5 million that GBLX should currently have in cash on hand after its most recent round of toxic funding, have given many the hope that by the time it manages to secure a permit, it will be ready for planting. However, even if GBLX was to prepare itself accordingly and use the latest state of the art growing methods immediately after securing the final permit it needs, it will still take months until it manages to get a crop out on the market. Which means that a report on its success during a potential rollout can be ready mid April 2015 at the earliest.
This is why investors are advised to do some in-depth due diligence, and seriously consider all the red flags that have been mentioned so far, before making up their minds about GBLX.