Here’s Why Recent GBLX Price Action Could Signal Big Upside for Solis Tek (SLTK)

- Fruits of SLTK labor paying off, exemplified by increased yield and production at companies like GB Sciences (GBLX).

- With demonstrable results at high-profile companies, SLTK nutrient line and grow lighting solutions could be set to take off in 2018.

Reading between the lines, there's good reason to think that Solis Tek (OTCQB:SLTK) is set up for a big 2018. Thanks to publicly traded GB Sciences (OTCQB:GBLX), which has said publicly that they use SLTK products in the cultivation of their medical and recreational cannabis, investors can now see that Solis Tek's grow lights and new nutrient line are producing big, even superior benefits for cultivators. With the the SLTK value proposition proving out in the real world, SLTK's revenues could be set to rise significantly in 2018, and recent investment research coverage from Wall Street suggests as much as 100% of upside within 12 months.

GB Sciences' Production Yield Bodes Well For SLTK

GB Sciences (OTCMKTS:GBLX) has been on a tear over the last few weeks as investors and traders realize that the small company's cannabis cultivation is finally paying off with revenue. GBLX sold their first cannabis harvest in July, with a yield of 133 pounds of product from 45 grow lights. Now, the company just announced that their October revenue was ahead of expectations, and the company is yielding about 2x the industry norm from their in-house cultivation efforts.

What most investors don't realize, however, is that another publicly traded company, Solis Tek, Inc. supplies GBLX's high-tech grow lights and ballasts, and even growing nutrients. We know that GB Sciences is a customer of Solis Tek, and the fact that the company is already out-producing industry peers speaks volumes to the quality of Solis Tek lighting products. GB Sciences has revealed that their production is twice what the industry expects to get - and this could be attributable to Solis Tek’s lights and nutrient additions. SLTK has already received the prestigious "Best Lighting Company of the Year" award from Dope Magazine, and the company’s lights outperformed numerous competitors in a recent independent head-to-head laboratory test.

Further, Solis Tek introduced their own nutrient line this June, and GB Sciences is already a customer according to the company. Terpenez, Solis Tek's first product, may be significantly enhancing the GBLX plants already.

Take special note of this - GB Sciences is already using Solis Tek's grow lights, and the company was operating at 200 grow lights in October. This was only 30% of their expected final capacity after further build out of their growing facility is completed. This infrastructure expansion could likewise be significant for SLTK if GB Sciences continues to utilize Solis Tek lighting fixtures and infrastructure. That could be a meaningful revenue stream alone.

Valuation Reasonable, Could Be Set For More Upside in 2018

With these kinds of yields pointing to significant growth potential, Solis Tek's current market valuation appears low. Recently, investment firm Taglich Brothers initiated on this undiscovered company with a $3.00 12-month price target based on conservative revenue growth in 2018 to $11.7 million. Shockingly, other cannabis companies are valued at significant multiples of their revenue, like Aurora Cannabis Inc. (OTCQB:ACBFF), which is currently marked at $2.4 billion in market capitalization based on a sales run rate of about $33 mln, or an 85x Price/Sales ratio. The valuations at growing, quality cannabis companies is impressive, and it may make sense - a growth industry with big upside like cannabis.

The excitement of 2014 and 2015 around cannabis companies is turning into reality now as small companies begin generating sales, and with excellent proof of product concept for Solis Tek, 2018 could be a big year for the small company. With Taglich Brothers conservatively targeting 100% of possible upside into 2018, and other companies trading at 40 to 90X their sales, SLTK could easily be worth multiples of where it trades.

Of course, risks exist with small-cap companies. Solis Tek has to execute well in a space that could see new, large competitors, and there are still regulatory hurdles for the cannabis industry... the federal government is still on the fence about the future of marijuana.

Nevertheless, SLTK has grown revenue over the last few years and their products are being used by growing cultivators, with good proof of concept. 2018 could prove fruitful for the Company and its shareholders.

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