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Tuesday, October 27, 2020

Cannabis Science Inc (OTCMKTS:CBIS) Rally Crushing the Bears

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Cannabis Science Inc (OTCMKTS:CBIS) is a penny play in the cannabis patch that we have covered a number of times in recent months. And our adventure with Cannabis Science stock is illustrative of a key concept with OTC stocks: If you dig too deep, you can miss the point. So, just look for the point.

In this case, we started off bearish on the name early last Fall, given the company’s long and checkered history of terrible shareholder dilution at every turn. However, by the late Fall, we got the point: they have something that can be sold to the public as “leadership in the medical marijuana game”, a narrative illustrated by their new relationship with the Dana Farber/Harvard Cancer Center (DF/HCC). For folks in the investment game who, after the November 8 voting, now need to show some kind of exposure to various elements of the cannabis revolution, that likely now includes CBIS on the short list. The result has been a major squeeze of folks who have kept looking at the company’s checkered past and never shifted to look at the point.

Cannabis Science Inc (OTCMKTS:CBIS) frames itself as a company that develops, produces, and commercializes phyto cannabinoid-based pharmaceutical products primarily in the United States. The company is involved in developing medicines for autism, blood pressure, cancer and cancer side effects, as well as for other illnesses comprising for general health maintenance. It also develops CS-TATI-1 for newly diagnosed and treatment-experienced patients with drug-resistant HIV strains, as well as those intolerant of available therapies; CS-S/BCC-1 to treat basal and squamous cell carcinomas; and a proprietary cannabis-based therapy for neurological conditions.

In addition, the company offers an online video-based medical cannabis education system, including courses, such as medical cannabis law, medical marijuana, cooking, horticulture, and bud tending; and manufactures and distributes specialty horse and pet grooming and topical applications. It has a license agreement with Apothecary Genetics Investments LLC to produce various brand formulations for California medical cannabis market.

Cannabis Science Inc also has collaboration with IGXBio, Inc. to develop GenePro, a DNA-based immunotherapeutic drug. Cannabis Science, Inc. is based in Colorado Springs, Colorado. Cannabis Science Inc is a subsidiary of Weedmaps Media, Inc.

According to company materials, “Cannabis Science, Inc., takes advantage of its unique understanding of metabolic processes to provide novel treatment approaches to several illnesses for which current treatments and understanding remain unsatisfactory. Cannabinoids have an extensive history dating back thousands of years, and currently, there are a growing number of peer-reviewed scientific publications that document the underlying biochemical pathways that cannabinoids modulate. The Company works with leading experts in drug development, medicinal characterization, and clinical research to develop, produce, and commercialize novel therapeutic approaches for the treatment for illnesses caused by infections as well as for age-related illness. Our initial focus is on skin cancers, HIV/AIDS, and neurological conditions. The Company is proceeding with the research and development of its proprietary drugs as a part of this initial focus: CS-S/BCC-1, CS-TATI-1, and CS-NEURO-1, respectively.”

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As noted above, the squeeze mentality has taken hold in Cannabis Science stock of late, pushing out the bears as new money flows into “leadership” names in the space. CBIS, through its recent legitimating moves, has put itself on that list.

In all, we’ve witnessed more than 200% during just the past month in terms of shareholder gains in Cannabis Science stock. The situation may continue to be worth watching. What’s more, the name has seen an influx in interest of late, with the stock’s recent average trading volume running nearly 160% above its longer run average levels.

Traders should note this as important given the stock’s relatively small trading float of 24M shares. Traders should not overlook this combination, as a jump in average daily transaction volume in a stock with a restricted float can unleash fireworks as supply is squeezed.

At this time, carrying a capital value in the market of $280.3M, CBIS has virtually no cash on the books, which is balanced by about $2.1M in total current liabilities. One should also note that debt has been growing over recent quarters. All of this still points to further dilution on the horizon and should be noted. CBIS is pulling in nominal trailing 12-month revenues of $49K. However, the company is seeing declines on the top line on a quarterly y/y basis, with revenues falling at -34.1%. You can bet we will update this one again as new information comes into view, and the chess game in shares of the stock plays out further. For continuing coverage on shares of Cannabis Science 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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