United Cannabis Corp (OTCMKTS:CNAB) is a penny play in the cannabis patch that has started to engage some focus among traders and investors as prices get a little traction in bounce mode. The stock is on the move again into the holiday weekend, and the primary catalyst appears to be the company’s announcement that Tangiers Global, LLC has provided the Company with a Fixed Funding Commitment for up to $5 Million.
Earnest Blackmon, United Cannabis’ Chief Executive Officer, commented on the announcement, “What a great way to end the year! We’ve retired our outstanding notes, established a growing revenue stream from our Prana products, and entered into several strategic relationships. This commitment from Tangiers gives us the financial resources we need to advance a number of the expansion projects we are pursuing, most notably the launch of our new extraction products and services and the initiation of clinical trials on our Prana line.”
United Cannabis Corp (OTCMKTS:CNAB) bills itself as a company that owns intellectual properties related to growth, production, manufacture, marketing, management, utilization, and distribution of medical and recreational marijuana, and marijuana-infused products in the United States.
It also provides consulting and product placement services related to marijuana industry. The company focuses on developing therapeutics, including Prana Bio Nutrient Medicinal products for supplement deficiencies related to the endocannabinoid system, including pain, neuropathy, arthritis, MS, IBS, autism, seizures, eczema, sleep, anxiety, head trauma, opioid dependency, and clinical endocannabinoid deficiencies; and Prana Aromatherapy Transdermal Roll-on line that provides targeted and large surface relief with combinations of aromatherapy.
CNAB has strategic partnerships with WeedMD RX Inc.; Harborside Health Center; and Westside Enterprises, LLC. The company also has a production and placement agreement with Jason Emo and Emotek LLC; licensing and exclusive distribution agreement with DNA Holding, LLC; and consulting and licensing agreement with Marcus Richardson.
The company was formerly known as MySkin, Inc. and changed its name to United Cannabis Corporation in May 2014. United Cannabis Corp was founded in 2007 and is based in Denver, Colorado.
According to company materials, “The Company’s Prana Bio Medicinal products provide patients a way to mix/match cannabinoids for therapeutic purposes. These products, licensed to regulated marijuana dispensaries, are broken into 5 categories that are available in capsules, sublingual’s, and topical delivery methods. The Company uses a patent-pending infusion process utilizing select fatty acids, lipids, and specific combinations of cannabis-derived terpenes to increase bioavailability.”
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As we have been noting as a consistent theme, the key to understanding who will see inflows versus outflows in the cannabis patch will be all about investment. Those who are able to muster the capital to press the market for expanded facilities or resources will see increased equity interest. The rich get richer in a high ROI context. CNAB is starting to put itself in a good position relative to that dynamic.
Justin Ederle, Managing Partner of Tangiers Global, LLC added, “We are very active in the cannabis sector and are always looking for innovative companies with strong growth potential over the long term. United Cannabis’ approach to the market made them a very attractive investment candidate – we were quite impressed with their management team, Prana line, strategic relationships in the US and Jamaica, intellectual property portfolio, and product pipeline. We are confident that our investment will provide United Cannabis the funds needed to capitalize on the many opportunities available to them and we look forward to working with them in that endeavor.”
Recent action has seen 22% added to share values of the stock over the past week of action. This is emblematic of the stock. CNAB is a stock whose past is littered with sudden rips. What’s more, the stock has registered increased average transaction volume recently, with the past month seeing just under -20% over the long run average. It pays to take note of this fact due to the tight float size in the stock (under 11M shares). It’s something the veterans know to key on: a mechanically driven price squeeze can result from this type of mix of small float and ramping attention from traders.
At this time, carrying a capital value in the market of $62.2M, CNAB has virtually no cash on the books, which leans against an appreciable load ($931.98k) of total accumulated debt. CNAB is making real money, with trailing 12-month revenues coming in at $734.59k. In addition, the company is seeing major top line growth, with y/y quarterly revenues growing at 98.4%. As more color becomes clear on the name, we will review the situation and update our take. For continuing coverage on shares of $CNAB stock, as well as our other hot stock picks, sign up for our free newsletter today and get our next hot stock pick!