TM editors' note: This article discusses a penny stock and/or microcap. Such stocks are easily manipulated; do your own careful due diligence.

Demand for legal marijuana continues to increase as new markets open and existing markets expand. This trend is just getting started and has created countless opportunities for ancillary businesses.

As the marijuana industry in the United States continues to expand, the need for lab testing services will continue to increase.

This need has created a significant opportunity for companies and we are favorable on this vertical of the legal marijuana industry.

One company capitalizing on this trend is EVIO, Inc. (EVIO), a life science company that provides accredited analytical testing services and scientific research to the regulated cannabis industry.

EVIO: Expands Capabilities and Reach in Oregon

EVIO has been executing on its strategy and we are favorable on the recent developments. In late October, the company announced that it has expanded testing capabilities in its Yuba City laboratory.

In anticipation of California's new testing rules which are scheduled to commence on January 1, 2018, EVIO has invested in additional instrumentation to offer a full suite of testing services including pesticide, microbiological, and expanded cannabinoid potency testing.

A week before this expansion, EVIO opened its fifth testing location in eastern Oregon. This is a significant development as it provides some validation to the company’s expansion strategy.

EVIO is a life science company that provides accredited analytical testing services and scientific research to the regulated cannabis industry. EVIO’s lab division provides state-mandated ancillary services to ensure the safety and quality of the nation's cannabis supply.

Executing on a U.S. Expansion

Over the last few months, EVIO has been nothing short of an execution story and it has been following through on its announcements. During this time, EVIO has expanded its reach and entered the Florida, Massachusetts, and California market.

In late July, EVIO Labs licensed its first lab in Florida and Kaycha Holdings, LLC will operate under the EVIO Labs brand and will be managed by a lab director with over 18 years of experience in the development of Nutraceutical and Pharmaceutical Products.

This development took place a few weeks after EVIO announced that will start providing analytical testing services to the southern California cannabis market.

EVIO plans to enter new markets throughout the United States in states where medical marijuana is legal. We are favorable on the entrance into the California market and this development came less than a month after EVIO signed a letter of intent to acquire Massachusetts-based cannabis testing lab, Viridis Analytics MA.

We are favorable on these developments and they are in-line with their growth strategy. The California, Florida, and Massachusetts marijuana markets are attractive due to their growth potential and diverse geographic location.

Makes Strategic Hire to Support Growth

EVIO has not only expanded its reach but the company has also made strategic additions to support this growth.

Last month, EVIO recruited a sixteen-year pharmaceutical industry veteran, Erika Miller, to oversee the company’s Yuba City Laboratory. She comes to EVIO from Genentech, a member of Roche Pharmaceuticals, where she worked in an FDA-regulated, Current Good Manufacturing Practice laboratory environment and will be a valuable resource for EVIO's manufacturing customers.

A Company to Watch

We are favorable on EVIO’s leverage to this market and believe that they have been executing on their strategy. The lab testing industry is expected to see incremental growth over the next few years and EVIO plans to capitalize on this growth by creating a coast-to-coast footprint in the United States.

After completing a reverse split in September, EVIO has been under pressure and the shares are trading at $0.53 after falling more than 50% since the split. The shares continue to look for a bottom and we believe this selloff is overdone and will keep an eye on how EVIO trades from here.