Demand Driven by Compliance Regulation
Point Roberts, WA - September 25, 2018 (Investorideas.com Newswire) Investorideas.com, a leading investor news resource covering security and cannabis stocks releases a sector snapshot of the growing video surveillance market and how cannabis, the fastest growing sector in the world, is creating additional market opportunities for video surveillance technology companies that can address compliance issues.
According to the research report “Video Surveillance Market by System (Analog, & IP), Offering (Hardware, Software, & Service), Vertical (Commercial, Infrastructure, Military & Defense, Residential, Public Facility, & Industrial), and Geography - Global Forecast to 2023”, the overall market is estimated to grow from USD 36.89 Billion in 2018 to USD 68.34 Billion by 2023, at a CAGR of 13.1% between 2018 and 2023. The increasing concerns for public safety and security, growing adoption of IP cameras, and growing demand for DIY and spy cameras are the key factors driving the video surveillance market growth."
Leading experts in the cannabis sector say that, “The cannabis industry is the fastest growing market in the world and the legal cannabis business is expected to generate $57 billion globally by 2027 as countries throughout the world continue to legalize its use and demand continues to grow exponentially.”
Compliance regulation for the legal marijuana industry requires video surveillance technology as a security measure, with demand for technology driven by regulation. So as the global cannabis industry scales up, so does the demand for security technology.
Looking at compliance issues in the U.S., “According to Adherence Compliance, a Denver-based company specializing in cannabis compliance, about 76% of all operators fail at least on inventory requirements, 72% on security and surveillance requirements, 67% on labeling and packaging, 64% on business records, and 53% on transport and storage.”
One company, DirectView Holdings, Inc. (OTC: DIRV), a video surveillance solutions technology company is ramping up to participate in this compliance gap and opportunity. With recent contracts in the education and hotels sector, the cannabis opportunity is now part of the future sales strategy.
DirectView Holdings discusses the issue of best video surveillance resolution in the cannabis sector on its website saying, “Unfortunately, many of the stipulations issued by state departments concerning the technology for marijuana surveillance do not exist or cannot be properly achieved. A good example of this includes the number of pixels requested in video surveillance systems. Unfortunately, the 640 pixels is not standard in such camera works and instead, require improved and accurate resolution to be able to identify individuals over an average 6.1 meters. Cameras with a 1080p resolution deliver better graphic quality over considerable distances making it a better choice for the identification of potential trespassers.”
They go on to state, “Legal requirements for marijuana markets include the recording of the entrances and the exits within the property. Officials request that surveillance cameras are properly angled to capture persons moving between these areas. It is important to rely on your official technology provider who can advise on the correct positioning of video cameras for surveillance purposes.”
“Regulations require that video footage retrieved from the surveillance system produces recordings of over 40 days. It is imperative that you invest in quality equipment with reliable recording functions and a significant memory. This ensures the compliant footage is retained and easily presented to officials who may request the recordings.”
“According to state practice, it has become a legal requirement for marijuana markets to comply with surveillance and security operations. Investing in top quality equipment for remote access and surveillance will ensure you comply. It can prevent unnecessary penalties and secure the licensed cannabis property.”
Looking at current and recent sales and growth prospects for the Company, yesterday, SeeThruEquity, an independent equity research and corporate access firm focused on smallcap and microcap public companies, announced it had issued an update on DirectView Holdings, Inc. (OTC PINK: DIRV) with a target price of $0.08.
DIRV reported record 1H18 results on August 20, 2018, with revenues reaching $2.3mn in the first half of 2018, up 70.3% versus $1.4mn in the year-ago period. DIRV generated growth from sales execution and the impact of the Apex and Video Surveillance LLC acquisitions, which took place in April 2017. We note that revenues of $2.3mn in the first half of the year are already approaching full-year 2017 revenues of $2.9mn. Results also included record gross profit dollars for the company, which were $1.0mn versus $0.7mn in the year-ago period. For the quarter, 2Q18, the company maintained revenues above $1mn, reporting a top line of $1.1mn, a 9.8% drop versus $1.2mn in 2Q17. EPS was $0.11 due to a non-operating gain from a change in the value of derivative securities
DIRV has issued multiple announcements citing new business wins in the last several months. The company reported new deals in the education sector from a Texas college and New York City private school and reported that it anticipated to sign a seven-digit master sales contract with Mission Foods providing extensive surveillance and access solutions for the company’s new logistics facility outside of Dallas, TX. Additional recent sales highlights of note include a new $150,000 video security contract for a premiere New York City hotel. In its announcement, DIRV management noted that the deal may be a harbinger of future business in the sector, stating that many hotel owners in New York City are opting to overhaul their existing and outdated security and surveillance systems. We note the hotel sector has been a source of strength in the past for DIRV, which counts Marriott, Trump Hotels, and Hilton among past installations.
Health Canada’s Guidelines for Licensed Producers (LPs) Security Guidelines are as follows: MMPR s43. (1) -The perimeter of the licensed producer’s site must be visually monitored at all times by visual recording devices to detect any attempted or actual unauthorized access.
MMPR s43. (2)-The [visual recording] devices must, in the conditions under which they are used, be capable of recording in a visible manner any attempted or actual unauthorized access.
Canadian listed cannabis stocks Aphria Inc. (TSX: APH.TO) (OTC: APHQF) and Liberty Health Sciences Inc. (CSE:LHS.CN) address compliance issues in their recent management discussions stating, “Security Requirements for Cultivation, Processing and Dispensing Facilities - With respect to security requirements for cultivation, processing and dispensing facilities, an MMTC must maintain a fully operational alarm system that secures all entry points and perimeter windows, and is equipped with motion detectors, pressure switches, and duress, panic and hold-up alarms. The MMTC must also have a 24-hour video surveillance system with specified features. MMTCs must retain video surveillance recordings for at least 45 days, or longer upon the request of law enforcement. An MMTC’s outdoor premises must have sufficient lighting from dusk until dawn.”
Aphria Inc. (TSX: APH.TO) (OTC: APHQF)
Liberty Health Sciences Inc. (CSE:LHS.CN)
According to their recent press release, Liberty Health Sciences Inc. is seeing significant growth.
Currently, Liberty operates four dispensaries and six delivery hubs. The Company has also signed seven new leases for dispensaries that are at various stages of permitting and construction. Last week the Company reported a 95% increase in sales revenue in the three-month period ended August 31, 2018 compared to the previous three-month period that ended May 31, 2018.
Radient Technologies Inc. (TSXV: RTI.V), a company that has a joint venture research agreement with Aurora Cannabis Inc.(TSX:ACB.TO) ( OTC: ACBFF) where Radient will be extracting cannabis oil from certain of Aurora’s dried cannabis, notes timing of the production of cannabinoid oils is tied to the following: ‘1st – 3rd Quarter (Calendar), 2018: Enhancements to Edmonton Facility. The Company has installed enhanced security systems including significant video storage capabilities and a storage vault.’ http://radientinc.com/files/fs/18-Q4-MDA.pdf
Radient extracts natural compounds from a range of biological materials using microwave assisted processing (“MAP™”), a patented technology platform which provides superior customer outcomes in terms of ingredient purity, yield, and cost. From its 23,000 square foot manufacturing plant in Edmonton, Alberta, Radient serves market leaders in industries that include pharmaceutical, food, beverage, natural health and personal care markets. Since 2016, Radient has expanded its offerings to enter the cannabinoids market utilizing its MAP™ platform to process and extract cannabinoids including cannabidiol and tetrahydrocannabinol from cannabis biomass.
So for surveillance technology companies, the cannabis door is open; feel free to knock.
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