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Tuesday, October 20, 2020

Cannabis Sativa Inc (OTCMKTS:CBDS) Moves Higher with Renewed Momentum

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Cannabis Sativa Inc (OTCMKTS:CBDS) is a micro-cap player in the cannabis patch that has started to harness renewed momentum so far in the new year. The company has been a bit less vocal on the newswires of late, but did reach out to traders recently to highlight the fact that its Hi Product line was featured in the Los Angeles Times business section in an article detailing trademarking and branding issues in the cannabis industry, on January 7, 2017.

Recent action has seen 37% tacked on to share pricing for the listing in the past month. The situation may be worth watching. CBDS has a history of dramatic rallies. Furthermore, the company has witnessed a pop in interest, as transaction volume levels have recently pushed 7% over the long run average. Traders should note this as important with a float in play that’s tiny — barely over 4.2M shares. One is wise to respect the dynamic this may create — a jump in average daily transaction volume in a stock with a restricted float can unleash fireworks as supply is squeezed. Since we last covered the name, the stock has moved 30.1%.

Cannabis Sativa Inc (OTCMKTS:CBDS) is a diversified play in the cannabis space. It’s most recent strategic footprint expansion came into place with its grab of iBudtender, Inc., a Colorado corporation that currently offers information and reviews of dispensaries, cannabis businesses, strains, edibles, concentrates and products.

In addition, the Company also offers herbal based line of products through its Wild Earth subsidiary, including Go Deep, a deep penetrating healing salve that reduces pain and inflammation when massaged into muscles, ligaments, tendons, and joints; Go Deep EXTRA, a deep penetrating pain relief ointment for use in mitigating migraine and sinus headaches; Face Garden, an antioxidant and moisturizing cream for the face; Body Garden, a moisturizing body lotion; and Lip Garden, an emollient balm.

But perhaps most importantly, the Company also directly engages in the research, development, and licensing of natural cannabis products comprising cannabis formulations, edibles, topicals, strains, recipes, and delivery systems.

CBDS plans to develop, produce and market products through joint ventures with companies licensed under state regulations applicable to cannabis businesses. It holds the license for a medicinal cannabis strain called NZT, a cannabis lozenge delivery methodology, and a cannabis trauma cream formula. Cannabis Sativa Inc is also developing a third strain of cannabis plant named CT22.

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As noted above, the company recently received some free publicity in the form of an LA Times story. The story showcases the hi product line and the current United States Patent and Trademark Office (USPTO) stance that although cannabis is widely being legalized by states, it is still federally illegal, thereby precluding trademark registration for cannabis products.

The article covers the tactic of cannabis companies trademarking ancillary products as the only course they can take to protect their intellectual property (IP).

The release goes on to note an interesting point that further plays in the company’s favor: The USPTO’s stance on cannabis trademarks appears to differ somewhat from their stance on cannabis patents. On December 20, 2016, Cannabis Sativa was awarded Patent PP27,475 fora Cannabis Plant. The plant, Ecuadorian Sativa, is also known as CTA. This is one of the few cannabis strains allowed by the USPTO and was the result of seven years of legal effort. The Company plans to market or license the patented strain using the names Ecuadorian Sativa and CTA. The stance of the USPTO on whether Cannabis Sativa will be awarded the trademark Ecuadorian Sativa or CTA, or whether it is implied in the patent is the quandary.

“We would hope that the USPTO recognizes Cannabis Sativa’s ownership of the Equadorian Sativa and CTA names, as they appear to be implicitly granted in the patent”, Tobias said. As stated in Koren’s article, “The goal of trademark law is to prevent consumer confusion, and different companies can use the same name for products as long as their products are in different categories and wouldn’t cause confusion”, and that “trademark protection can apply not only to products a company makes now, but to products that a company might reasonably be expected to make later on — what trademark lawyers call the zone of natural expansion”. We are hopeful that industry awareness and articles such as Mr. Koren’s will help shift the USPTO’s stands on the issuance of trademarks for cannabis related products.”

Earning a current market cap value of $124.1M, CBDS has virtually no cash on the books, which must be weighed relative to about $336K in total current liabilities. One should also note that debt has been growing over recent quarters. CBDS is pulling in trailing 12-month revenues of $76K. In addition, the company is seeing major top line growth, with y/y quarterly revenues growing at 5.2%. This is an exciting story, and we look forward to a follow-up chapter as events transpire. For continuing coverage on shares of $CBDS 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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