United Cannabis Corp (OTCMKTS:CNAB) is a cannabis play that has offered one wild ride after another over the past 9 months. One might see CNAB down from $3/share to under a dollar and think it’s weak. But seen another way, if you bought it at $0.16 last September, you’re up 350% in under a year. (Last time I checked, that ain’t bad). CNAB’s latest catalyst came this week when it announced that Jamaica’s Ministry of Health has registered its Prana P5 Hemp Bio Nutrient Capsules, Aromatherapy Roll-On and Sublingual Drops, and approved a Jamaican bilateral partner of the Company, Caribbean Research & Development Limited, to begin production in Jamaica.
According to the release, the company now has approval through this partner to research, cultivate, manufacture, and distribute its CBD-based products in Jamaica and reciprocal countries, giving CNAB and CRD immediate means to revenue. “The Company has begun to secure facilities, hire and train staff and establish necessary contacts. The Company expects to commence production within 90 days.”
United Cannabis Corp (OTCMKTS:CNAB) teamed with Jamaica-based Cannabis Research & Development initiating a pilot program in collaboration with the Rastafari Studies Centre for Cannabis Research, University of West Indies, Mona, to establish protocols for the development of Ital Standards which will be used as a guide for the processing, cultivation and consumption of cannabis.
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CNAB will work in collaboration with the Rastafari Studies Centre to support the activities of the DHAPA Association in accord with their broader objective of establishing an infrastructure for licensed Rastafari farmers and trainees to participate in the Jamaican marijuana industry.
The Joint Venture’s initial task will be to document and verify the genetics of the Centre’s preliminary plantings, as well as provide guidance in the development of appropriate standards and training methods for future activities.
As noted above, CNAB has been an extremely volatile name, currently in the grips of an extended corrective move. However, the company just secured the means and rights to get down to business in Jamaica, which – according to their communications material – puts this company in immediate shape to generate revenues.
Whether or not this will actually happen is another story. But traders would be wise to keep this one on the radar. As stated by management, they foresee about a 3-month outside lag to initiating real production.
Earnest Blackmon, Chief Executive Officer of CNAB, commented on the announcement, “This is the culmination of a four-year effort by the management of United Cannabis to create a relationship with a supportive government in the Caribbean in order to give patients in the area access to improved, alternative health choices, greater access to research, and to create jobs and tax revenues for the local community. To that end, we have initially budgeted over $2 million for investment in facilities and operations at CRD to help ensure a world class operation in Jamaica.”
We’ve witnessed about -5% stripped out of the name during the trailing week. However, CNAB has evidenced sudden upward volatility on many prior occasions. Furthermore, the listing has seen interest climb, with an increase in recent trading volume of 12% above its longer run average levels.
This should not be overlooked given the stock’s tight trading float of just a tad more than 15M shares. As savvy traders are well aware, a jump in average daily transaction volume in a stock with a restricted float can unleash fireworks as supply is squeezed.
Currently trading at a market capitalization of $44.04M, United Cannabis Corp (OTCMKTS:CNAB) has virtually no cash on the books, which must be weighed relative to about $570K in total current liabilities. CNAB is pulling in trailing 12-month revenues of $659K. However, the company is seeing declines on the top line on a quarterly y/y basis, with revenues falling at -22.7%. You can bet we will update this one again as new information comes into view. 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!
Disclosure: we hold no position in $CNAB, either long or short, and we have not been compensated for this article.