INLB - Item 9 Labs (INLB) - Notes from NobleCon18

NobleCon 18. Item 9 Labs CFO Bobby Mikkelsen presented at NobleCon18. The Company's franchising strategy and expansion were the main focus of the presentation. A rebroadcast is available at https://noble.mediasite.com/mediasite/Catalog/Full/4ec6170801b441318e66ea53d53540a421.Reg. A Recap. Recall that in March of 2022, Item 9 Labs launched a regulation A offering of 28 million units of one share and one-half warrant, with a maximum proceed of $67.2 million. Management highlighted this offering in their presentation with the purpose of expanding the Unity Rd. franchise national footprint and growing the product into new markets, similarly to their expansion into New Mexico just recently.Further Market Expansion. The regulation A offering provides a solid platform for the Company to enter new markets, in our view, as management pointed out in their presentation of the potential target markets for expansion, including Missouri, Pennsylvania, Vermont, and Connecticut. This, coupled with an ability to sign on entrepreneurial groups, bodes well for Item 9 Labs in the future.Internal Upgrades. Item 9 Labs' Arizona facility is being expanded on, tripling the size of the facility to 85,000 square feet for increased inventory as well as decreasing costs and less reliance on third party material. This is expected to be done by the end of the year. The Nevada facility is close to being complete, with only a generator needing to be added, and is expected to be operating in Q3 or Q4 of this fiscal year.Maintaining Outperform and $4.00 PT. We are maintaining our Outperform rating and $4.00 12-month price target on INLB shares. Item 9 Labs is combining a traditional cannabis cultivation operation with an asset light franchise dispensary model to expand across the nation. We believe the combination creates a differentiated business model that offers premium products and distribution through an expanding network of dispensary franchises. Read More >>