“The most efficient way for us to take advantage of the explosive growth in the industry is to be proactive and bring our goods directly to our customers. Since June, we’ve developed and launched the first 17 states of our nationwide sales expansion plan,” said GrowLife President Marco Hegyi. “Also, we’ve shed more than 60 percent in operating expenses from under performing retail and business units with this plan. This increases our ability to reach a significantly larger customer base, thus generating greater revenue at a much lower operating cost. We’ve passed on these savings to the customer as well.”
GrowLife activated its nationwide sales network initially servicing Arizona, California, Colorado, Connecticut, Delaware, District of Columbia, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Oregon, Pennsylvania, Rhode Island, Vermont and Washington. With GrowLife, specialty cultivation facilities can be assured they will have timely and reliable access to the industry’s premium supplies such as farming soil, plant nutrients, hydroponic equipment, and thousands more products.
Also announced today is an enhanced strategic partnership between GrowLife and CANX. The partnership, as agreed to under an amended joint venture, increases funding resources to three new and significant channels for GrowLife. In addition to its expansion efforts, GrowLife will apply these new funding resources to high-value, cash-flowing mergers and acquisitions that are critical to the business.
Under this partnership, CANX agrees to provide GrowLife with $10 million in working capital with secured loans, $12 million in GrowLife-direct M&A capital resources, and joint venture M&A financing exceeding the $40 million cap, imposed by the previous arrangement. All transactions must be approved by the joint venture and meet a pre-determined deal criteria. Furthermore, CANX has waived defaults from the prior November 19, 2013 contract with GrowLife. In addition, the Company obtained waivers of default from other lenders, which were triggered by the trading halt back in April.
“We’ve removed many obstacles, distractions, and secured financial resources necessary to stabilize the company and launch 2.0,” said Hegyi. “CANX and GrowLife have come together under a revised agreement that gives us access to capital under favorable terms that are designed to mitigate risk, generate cash flow and return on investment. Except for resolving the class action and grey sheet matters, which we are pursuing, we’ve paid the price to take corrective action, cut about $160,000 in spending each month, and are now focused on building the nation’s largest cultivation product and service network.”