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NEW YORK (MainStreet) — Growlife Inc. (PHOT), a hydro grow consulting and supplies company, has now joined the ranks of cannabis-related companies to establish a national, in this case 17 state presence. Expansion to additional states is on the drawing board for later in the year. Growlife started the expansion of its sales network in Arizona, Colorado, Oregon, Washington state and California as well as serving ten states in the North East.

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"We are the guys in the middle," said Marco Hegyi, the company's CEO said. "You come to us, we have the knowledge, we will help you figure this out. We understand the latest technology, from nutrients, to smart soils."

Hegyi compares Growlife to an operating system, in the sense that it does not grow the strains because "application developers" (or growers) do that. Instead, he said, Growlife functions as the OS layer.

In partnership with well backed CANX USA LLC (CANX) the company now has the financial backing to support its planned expansion as well as M&A initiatives.

Under the terms of the new agreement, CANX will provide Growlife with $10 million in working capital via secured loans, $2 million in direct M&A resources and joint venture financing worth over $40 million. The company has also obtained waivers of default from other lenders which were triggered by the SEC's actions to halt trading of company stock in April.

At that time, the company announced several changes in leadership as well as other organizational shifts that had been underway since the beginning of the year. These include resolving outstanding legal matters and clearing up, according to Hegyi "gray sheet matters." Overall Hegyi, whose background is in the IT industry, is very upbeat about the future of the company he now helms.

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"We've paid the price to take corrective action, cut about $160,000 in spending each month, and are now focused on building the nation's largest cultivation product and service network," he said.

According to Hegyi, this is the launch of Growlife "2.0." As he said, "CANX and Growlife have come together under a revised agreement that gives us access to capital under favorable terms that are designed to mitigate risk, generate cash flow and return on investment."

Hegyi, who joined the company late last year and took over the reins as company head this spring, is clear about his vision for the company's future.

"We have shed more than 60% in operating expenses from underperforming retail and business units," he said. "This increases our ability to reach a significantly larger customer base, thus generating greater revenue at a much lower operating cost."

The company also prides itself in helping growers control the bottom line.

"We are building an industry that tries to take a combination of skills sets and focuses," Hegyi said. "Today the most contemporary issues are mostly in the way we are actually coming together to use cutting edge knowledge and technology to build the vertical."

"We are building an industry that tries to take a combination of skills sets and focuses," Hegyi said. "When I started six months ago, I realized we have to throw the book away. Today the most contemporary issues are not the laws but way we are actually coming together to use cutting edge knowledge and technology to build the vertical."

--Written by Marguerite Arnold for MainStreet