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Tuesday, October 20, 2020

CV Sciences Inc (OTCMKTS:CVSI) The Trend is Your Friend

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CV Sciences Inc (OTCMKTS:CVSI) is a penny stock that has grabbed hold of the attention of traders during the stock’s recent rally. Even though this is a synthetic CBD play, it is certainly intimately enmeshed in the Green Rush 2.0 phenomenon, as everything in any way related to the cannabis space goes into manic mode into what we have been calling a “referendum on marijuana in the US” – on November 8, nine states representing over 30% of the US population will vote on the future of marijuana legislation.

At this point, legalization is winning in the polls in just about every case, suggesting that the overall sales footprint could be on the verge of tripling in a moment. Perhaps even more importantly, the public reputation of marijuana and cannabis, as well as the synthetic CBD market, will likely enter a new phase in terms of cultural context.

CV Sciences Inc (OTCMKTS:CVSI) frames itself as a life science company, focuses on developing and commercializing novel therapeutics utilizing synthetic Cannabidiol (CBD).

CVSI operates two distinct business segments: a drug development division focused on developing and commercializing novel therapeutics utilizing synthetic CBD; and, a consumer product division in manufacturing, marketing and selling plant-based CBD products to a range of market sectors, including nutraceutical, beauty care, specialty foods, and vape.

Following the CanX Acquisition in December 2015, CV Sciences commenced its preclinical drug development program during the second quarter of 2016. The Company’s drug development efforts include pursuing synthetic-based Cannabidiol drug candidates in areas that have potential to provide significant improvements in therapeutic patient treatments with sizable addressable markets.

The company was formerly known as CannaVEST Corp. and changed its name to CV Sciences, Inc. in January 2016. CV Sciences, Inc. has primary offices and facilities in Las Vegas, Nevada and San Diego, California.

CVSI is led by Michael J. Mona, JR. founder of CV Sciences, Mr. Mona possesses over 30 years of senior management experience in a range of industries including real estate/construction, industrial farming, chemical processing and consumer products. Mr. Mona is a recognized industry leader in hemp farming operations and chemical extraction and has established a global supply chain of hemp-derived products.

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Last time we covered this stock, we noted that we had a “bullish outlook as the stock breaks higher on rapidly expanding volume… The breakout is significant because of its technical nature. In our experience, OTC stock technicals can be extremely telling. When you see something close above major moving averages on expanding volume and no new press releases, it is very often a sign of insider purchase activity. We are only speculating here, but it stands to reason, particularly given the likely expanded pie we are about to see where the Cannabidiol market is concerned.”

As far as recent catalysts, the company hasn’t been out with much since its shareholder update some weeks ago. At that time, the focus was its big push to capture market share in the treatment of smokeless tobacco addiction.

The Company discussed its multi-billion market opportunity presented by a new drug candidate that comes in the form of a proprietary chewing gum that combines synthetic CBD and nicotine to effectively treat smokeless tobacco addiction. CVSI execs put this as a $5.3 bln opportunity.

We also noted that the Company was clearly maintaining an aggressive bearing just when it should: With the context set for growth in the space, the Company’s CBD Consumer Division has grown from 120 retail locations to now over 700 locations.

Currently trading at a market capitalization of $45.8M, CVSI has a decent store ($1.41M) of cash on the books, with total assets just under $27M, which is balanced by an appreciable load ($2.33M) of total accumulated debt. We’ve witnessed above 200% piled on for shareholders of the listing during the trailing month. This is emblematic of the stock. CVSI has evidenced sudden upward volatility on many prior occasions. In addition, the listing has benefitted from a jump in recent trading volume to the tune of a bit over 340% over what the stock has registered over the longer term. That’s a strong indication of a continuing trend in place, and we would continue to respect that dynamic. For continuing coverage on $CVSI stock, as well as our other hot stock picks, sign up for our free newsletter today and get our next hot stock pick!

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