SEATTLE, WA / ACCESSWIRE / March 1, 2016 / The reliability of cannabis testing has become a challenge in an industry that GreenWave Advisors believes could reach $35 billion by 2020. With tens of thousands of products recalled for illegal pesticide use, cannabis consumers face a lot of uncertainty when buying products off dispensary shelves. Separate studies have shown that THC and CBD concentrations are regularly mislabeled and could create problems for medical and recreational users alike. There is no quick, easy, or affordable way for consumers to test cannabis safety and composition.
MyDx Inc. (MYDX) has spent the last three years and close to $7.6 million in capital researching, developing, and bringing to market a solution for consumers to quickly, easily, and affordably determine the safety and composition of what they eat, drink and inhale. The solution is MyDx, a handheld chemical analyzer. The company is positioned to scale and expand its applications this year. Last year the company completed several milestones including beta testing 200+ units in February, going public in May, releasing product in July and recording its first revenues in September.
Founder and CEO Daniel Yazbeck began his career as a Scientist for Pfizer Inc. (NYSE:PFE) specializing in chemical research and development technologies. After Pfizer, Yazbeck helped Panasonic Corporation (OTC:PCRFY) apply its existing technology to develop new products and enter new medical verticals and also started his own investment group focused on asset-backed investments. Leveraging his prior experience, he founded MyDx in 2013 and created an innovative device capable of measuring the chemical signature of samples consumers may eat, drink, or inhale.
Mr. Yazbeck is joined by a world-class team that is committed to advancing the company:
MyDx - short for "My Diagnostic" - is a handheld chemical analyzer that works in combination with a smartphone app to test and provide an analysis of a chosen sample. By placing an approximately 50 mg sample of cannabis into the sample chamber and connecting to their smartphone via Bluetooth, users press the "Start" button on the smartphone app and within minutes receive analysis of the chemical profile of their cannabis as well as a prediction of how the tested sample may make a user feel or what symptoms it may relieve.
MyDx's basic analyzer device is available for $699.00 and comes with an initial CannaDx Sensor along with 15 sample inserts. Additional sensors for various applications ranging from food to air analysis are under development. Each sensor is under warranty for at least 6 months and replacement sensors are $69.95. The Company also offers warranty packages to extend coverage for the sensors. The CannaDx Sensor, currently the only sensor being offered on the market, analyzes 20+ different medically relevant chemicals in cannabis flower. Compared to the high costs of laboratory testing, which often charge close to $50/test for the analysis of 3 chemicals, each test requires an insert at a nominal cost of $1.49/insert to analyze the cannabis sample for 20+ different chemicals. This model is a razor-razorblade recurring revenue stream that grows along with its customer base. Users also have free access to the iOS and Android app as well as the cloud services that hold their data.
The MyDx Analyzer leverages "electronic nose" technology, which is designed to mimics nature's ability to detect chemicals through smell. Unlike the human nose, this technology detects chemicals at the parts per billion level and matches them against an extensive reference database. This underlying technology has also been used for over 15 years by NASA to test air quality and has also been used in clinical studies conducted by the Bill and Melinda Gates Foundation to detect tuberculosis in breath.
The company is initially applying the technology to the cannabis industry, which grew 74% to $2.7 billion in 2014 and is expected to reach $10.8 billion by 2018. With 27 states approving medical cannabis use and 5 additional states approving adult-use cannabis, there is a growing need for reliable cannabis testing for safety, potency, and efficacy. The possibility of California and Nevada legalizing cannabis for adult-use this year in November could accelerate the market growth and require these kinds of testing solutions for the industry.
Cannabis contains over 400 different chemicals, comprised of terpenes and cannabinoids. These compounds work together synergistically to produce an effect on the human mind and body. CannaDx measures cannabis flower for 20+ chemicals of interest and correlates these chemical combinations with a user's feeling and ailment relief.
During its latest investor conference call, the company reported thousands of users and over 20,000 data points registered in its database. This CannaDx software has populated enough crowdsourced data from other users that it can actually predict how a random tested sample will affect users through machine learning algorithms - think, "energetic" versus "calm" for a particular strain.
With science based research at its core, MyDx is learning which cannabinoids and terpenes, and in what ratios, effect people in different ways.
In the future, the technology will be able to leverage a user's location to find nearby dispensaries that carry products with chemical profiles users are seeking.
The technology has caught the attention of the cannabis community at large. The company has been recently featured in many media outlets including a November 2015 article on CNET - a popular tech website. Cannabis industry publications such as MG Magazine, High Times and, of course, CannabisFN, have also featured MyDx. In addition to these media mentions, MassRoots Inc. (OTCQB:MSRT) named the CannaDx analyzer as the Official Marijuana Analyzer of the cannabis community and CannaInsider named it the Coolest New Product for Cannabis Enthusiasts in its 2016 Cannabis Guide.
Sales & Marketing
While the company is still in the early stages of commercialization, marketing efforts are steadily increasing online, in-person, and through distribution efforts. Currently, the CannaDx is actively advertised on websites in it's growing online affiliate network, including Leafly's website through a banner ad appearing alongside various strains in the strain explorer. Leafly has an Alexa ranking that places it among the 2,500 top websites in the United States. Management has also been featuring the device in-person at a number of cannabis events and conferences, such as the Emerald Scientific Conference, Emerald Cup, New West Summit, High Times Cannabis Cup and the Marijuana Investor Summit, to showcase the technology directly to consumers and investors.
In addition to its paid advertising, the company organically ranks #1 on Google for key search words such as "cannabis tester," which has been a major contributor to its growth over the past several quarters, and has over 167,000 followers on a wide array of social media outlets. On MassRoots, the company has over 29,000 followers and is one of the most followed companies on the cannabis industry's most popular mobile platform. This significant organic exposure should help accelerate its sales efforts without increasing its overall marketing expenses.
The MyDx analyzer is the only affordable consumer-grade device on the market to test cannabis that is backed by extensive lab testing. In addition to cannabis testing, the company plans to expand into food, water, and air testing over the coming quarters, which could open the door to significantly larger end markets. Consumers and freelance professionals could use this device in a variety of applications, from simply testing fruits and veggies to testing air quality at home.
Management's strategy to enter into these markets is three-fold - web sales, inside sales, and channel partners. While web sales provide an early customer acquisition channel, the company has also hired inside sales representatives to focus on B2B and B2C markets. The longer-term goal is to continue to develop its pipeline of distribution prospects and secure purchase orders and contracts that order 100 or 1,000 units in parallel to selling individual units on it's website.
In addition to device sales, the data generated by users could prove extremely valuable over the long-term. The data may help validate which cannabinoids and terpenes are effective in achieving specific results. For growers, the data could help them improve strain development by targeting specific chemical make-ups. For dispensaries, the information could greatly help with product positioning and marketing efforts to improve the quality of service.
MyDx restructured last year in order to effectively grow the company. Over the last 7 months, the company has generated sustainable growth and positioned itself to achieve profitability sooner by significantly reducing its burn rate by over 50% and focusing on shareholder value by steadily increasing its online sales and distribution. Upon effectiveness of its S-1, the company should have ample opportunities to finance its future growth by leveraging its public company status.
Last quarter, the company reported revenue of $219,180 and a 40.2% gross margin, although fulfilling shipments of its original Indiegogo campaign negatively affected these margins. Management seeks to scale higher revenue over the coming periods, while maintaining or increasing gross margins. While the expenses associated with the initial launch of the product were high the last few quarters, the company anticipates further reducing its burn rate to achieve breakeven sooner.
On an asset level, the company continues to progress the development of its intellectual property as it moves to the national stage.
See a product demonstration video below:
MyDx is uniquely positioned to capitalize on the rapidly growing cannabis industry through its consumer-grade testing device with a razor-razorblade business model. With commercialization already underway, the company is likely to soon reach a tipping point in its corporate history as it works to scale revenue and move towards profitability. The company's long-term potential could also unlock tremendous value as it builds up distribution and monetizes its data.
By combining hardware with software, the company is developing a product that shares similarities with FitBit Inc. (NYSE:FIT), Lifelogger Technologies Inc. (LOGG) and bBooth Inc. (BBTH) in terms of personal tracking and hardware integrations. In other ways, the company provides diagnostic tools in the same way that Roche Holdings Ltd. (OTC:RHHBY) and Abbott Laboratories Inc. (NYSE:ABT) do within the diagnostics industry. And finally, investors in cannabis stocks like Pharmacyte Biotech (PMCB) and Pineapple Express Inc. (OTC:PNPL) may also want to take a closer look, given its initial focus on the industry.
For more information, visit the company's website at www.cdxlife.com.
For a recent White Paper published by the company that covers the state of the cannabis testing industry and highlights the accuracy of the product, please click here.
To see informative company videos, please visit https://www.cdxlife.com/overview-video/.
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Except for the historical information presented herein, matters discussed in this article contain forward-looking statements that are subject to certain risks and uncertainties that could cause actual results to differ materially from any future results, performance or achievements expressed or implied by such statements. Important factors that could cause these differences include, but are not limited to, the demand for the company's services, governmental regulation of the cannabis industry, and the company's ability to execute its business plan. Emerging Growth LLC dba TDM Financial, which owns CFN Media, is not registered with any financial or securities regulatory authority, and does not provide nor claim to provide investment advice or recommendations to readers of this release. Emerging Growth LLC dba TDM Financial, which owns CFN Media, may from time to time have a position in the securities mentioned herein and may increase or decrease such positions without notice. For making specific investment decisions, readers should seek their own advice. For full disclosure please visit:http://www.cannabisfn.com/legal-disclaimer/.
SOURCE: CFN Media