urban-gro, Inc. Signs $24 Million Construction Contract With Leading Midwest MSO

Rhea-AI Summary

urban-gro, Inc. (Nasdaq:UGRO) has secured a significant $24 million construction contract with a leading Midwest-based Multi-State Operator (MSO) for building a state-of-the-art vertically integrated cannabis facility. This contract follows the successful completion of the facility's design and preconstruction phases. The company, which specializes in providing solutions to Controlled Environment Agriculture (CEA) and commercial sectors, expects to recognize the project's revenue within the 2025 calendar year.

Positive

• Secured substantial $24 million construction contract
• Revenue recognition expected within 2025 calendar year
• Successfully completed design and preconstruction phases

Negative

• None.

Insights

Construction and Cannabis Industry Analyst

This $24 million construction contract represents a transformative deal for urban-gro, particularly given the company's current market capitalization of approximately $10.6 million. The contract value is more than 2.2 times the company's market cap, highlighting its potential material impact on financial performance.

The project's scope - a vertically integrated cannabis facility - is particularly noteworthy. Vertical integration in cannabis operations typically encompasses cultivation, processing and retail capabilities under one roof, requiring sophisticated environmental controls and specialized infrastructure. This complexity plays directly into urban-gro's core competencies in CEA design and construction.

The contract structure, with design and preconstruction phases already completed, suggests a de-risked execution pathway. This phased approach typically allows for better cost control and timeline management, while the revenue recognition timeline within 2025 indicates strong project confidence.

For investors, three key aspects warrant attention: First, this contract could significantly strengthen urban-gro's balance sheet and cash flow position. Second, the partnership with a leading MSO could lead to additional opportunities as the client expands operations. Third, successful execution could position urban-gro as a preferred partner for similar large-scale projects in the growing cannabis infrastructure market.

The strategic value extends beyond immediate revenue. By demonstrating capability in delivering comprehensive Design-Build solutions for complex CEA facilities, urban-gro is positioning itself at the higher-value end of the market, where margins are typically more favorable than in simple construction or equipment supply contracts.

LAFAYETTE, COLORADO / ACCESS Newswire / February 6, 2025 / urban-gro, Inc. (Nasdaq:UGRO) ("urban-gro" or the "Company"), an integrated professional services and Design-Build firm offering solutions to the Controlled Environment Agriculture ("CEA") and commercial sectors, today announced the signing of the construction phase of a significant Design-Build contract with a leading Midwest-based Multi-State Operator ("MSO") to build their state-of-the-art vertically integrated cannabis facility.

Valued at close to $24 million, this contract milestone follows the successful completion of the facility design and preconstruction phases. The Company anticipates recognizing the project's revenue this calendar year.

"We are excited to deepen our partnership with this client through the execution of the next phase of our Design-Build contract. Our collaboration with this MSO highlights our strategic focus and extensive industry expertise, where the demand for innovative and efficient facilities is paramount," said Bradley Nattrass, Chairman and CEO of urban-gro.

About urban-gro, Inc.

urban-gro, Inc.® (Nasdaq:UGRO) is an integrated professional services and Design-Build firm. We offer value-added architectural, engineering, and construction management solutions to the Controlled Environment Agriculture ("CEA"), industrial, healthcare, and other commercial sectors. Innovation, collaboration, and creativity drive our team to provide exceptional customer experiences. With offices across North America and in Europe, we deliver Your Vision - Built. Learn more by visiting www.urban-gro.com.

Safe Harbor Statement

This press release contains forward looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. When used in this release, terms such as "believes," "will," "expects," "anticipates," "may," "projects" and similar expressions and variations as they relate to the Company or its management are intended to identify forward-looking statements. The forward-looking statements in this press release include, without limitation, the expected magnitude and timing of revenue to be recognized from the Design-Build project described herein, demand for design-build services in the cannabis industry, and future collaborations with the client. These and other forward-looking statements are based on current expectations, forecasts, and assumptions that involve risks and uncertainties that could cause actual outcomes and results to differ materially from those anticipated or expected, including, among others, our ability to accurately forecast revenues and costs, our ability to predict and respond to new laws and governmental regulatory actions, including delays granting licenses to clients or potential clients and delays in passage of legislation expected to benefit our clients or potential clients, risks related to adverse weather conditions, supply chain issues, rising interest rates, economic downturn or other factors that could cause delays or the cancellation of projects in our backlog or our ability to secure future projects, our ability to maintain favorable relationships with suppliers, risks associated with reliance on key customers and suppliers, our ability to attract and retain key personnel, and risks related to our information technology systems and infrastructure. A more detailed description of these and certain other factors that could affect actual results is included in the Company's filings with the Securities and Exchange Commission. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. The Company undertakes no obligation to update any forward-looking statements to reflect events or circumstances after the date hereof, except as may be required by law.

Investor Contact:

Jeff Sonnek - ICR, Inc.
(720) 730-8160
investors@urban-gro.com

Media Contact:

Barbara Graham - urban-gro, Inc.
(720) 903-1139
media@urban-gro.com

SOURCE: urban-gro, Inc.

View the original press release on ACCESS Newswire

FAQ

What is the value of UGRO's new construction contract announced in February 2024?

urban-gro (UGRO) announced a construction contract valued at approximately $24 million with a leading Midwest-based Multi-State Operator.

When will UGRO recognize revenue from the $24M cannabis facility construction project?

urban-gro expects to recognize the revenue from the $24 million construction project within the 2025 calendar year.

What type of facility is UGRO constructing in the Midwest?

UGRO is constructing a state-of-the-art vertically integrated cannabis facility for a Midwest-based Multi-State Operator (MSO).

What phases of the Midwest cannabis facility project has UGRO completed?

UGRO has completed the facility design and preconstruction phases, and is now moving forward with the construction phase of the project.