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Tuesday, November 24, 2020

United Cannabis Corp (OTCMKTS:CNAB) Finds a New Type of Motion

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For traders in search of a bargain-basement bottoming type of pattern with some newfound momentum, you might want to take a fresh look at United Cannabis Corp (OTCMKTS:CNAB). This is a very small float play in the cannabis patch that exploded higher on Wednesday with no new press from management. The breakout took shares above the 50-day SMA on a major jump in volume.

Earlier this month, the company announced that it had initiated clinical trials on its Prana Bio Nutrient Medicinals P1 Capsules for the treatment of chronic pain at Jamaica’s University of the West Indies. According to the release, “The study, titled ‘An Open-Label, Phase 1, 2-Way crossover study evaluating the pharmacokinetics of Prana P1 THC activated capsules’, is to be conducted in conjunction with Cannabinoid Research & Development, the Company’s Jamaican subsidiary, at the Centre For Cannabis Research at the University’s Mona Campus.”

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 the 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 noted above, shares of CNAB boomed higher on Wednesday, breaking above recent resistance on a jump in volume. In all, we’ve witnessed 67% during the past week in terms of shareholder gains in the listing, a rally that has pushed up against longer standing distributive pressure in the stock.

Furthermore, the name has seen a growing influx of trading interest, with the stock’s recent average trading volume running nearly 370% above the average volume levels in play in this stock over the longer term. This should not be overlooked with the stock trading on a float that is extremely small at just 15.2 million shares.

Earnest Blackmon, Chief Executive Officer of United Cannabis, commented on the announcement, “We are very proud to announce the commencement of our clinical trials; we have been working toward this goal since we started the Company. The Prana products represent the culmination of years of research and development, and I am confident that the results will confirm the anecdotal evidence we have seen with patients since first introducing our Prana product line six years ago.”

Earning a current market cap value of $36.8M, CNAB has a reserve ($535K) of cash on the books, which stands against about $1.7M in total current liabilities. One should also note that debt has been growing over recent quarters. CNAB is pulling in trailing 12-month revenues of $2.4M. In addition, the company is seeing major top-line growth, with y/y quarterly revenues growing at 881.6%. We will update the story again soon as developments transpire. Sign-up for continuing coverage on shares of $CNAB stock, as well as other hot stock picks, get our free newsletter today and get our next breakout pick!

Disclosure: we hold no position in $CNAB, either long or short, and we have not been compensated for this article.

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