Todor Pichurov

Growlife Inc (OTCMKTS:PHOT) Surges on Broad Sector Excitement

by Todor Pichurov March 25, 2016

In yesterday's session almost all OTC pot stocks got a leg up on the charts. Growlife Inc (OTCMKTS:PHOT, PHOT message board) was also among those who closed green in double digits. By the bell PHOT was 21% up, now back at $0.02 per share.

The reason behind this general excitement about pot stocks can be traced back to last week's breakthrough that GW Pharmaceuticals scored. The company soared 120% on news of Phase 3 clinical trials success. The big player gave momentum to most OTC pot stocks and this last push could be an aftershock of that initial splash.

Another factor contributing to this new green push in OTC pot stocks could be an article published yesterday by the LA Times that spoke of “Big Marijuana”. The state of Washington introduced “a rule” allowing investors from outside WA to invest in the local marijuana industry. Colorado is expected to follow suit with a similar ruling. The fans of OTC pot stocks are known for being easily excitable and it's not unlikely that this article brought on a new bubble of hype.

With PHOT in particular this sort of hype is even less understandable. The company popped hard after exiting the grey sheets and returning to the pink sheet tier. However, its chart performance past the initial spike has been abysmal.

In previous articles we have examined PHOT's issues, including last reported revenues, gross losses and further dilution stemming from class action lawsuit settlements. To top it all off, the company revealed that on March 10 and March 17 it pumped out a total of 64 million new shares at $0.007, as a result from the conversion of notes.

Anyone who had actually bothered to read the company's last reports would know that PHOT had convertible debt that can turn into shares at double zeroes. It only makes sense that the noteholders would seek to convert now that the stock is priced at multiple cents per share.

PHOT's annual report for 2015 is due next week.

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