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Thursday, November 26, 2020

What’s Behind the Mysterious Jump in General Cannabis Corp (OTCMKTS:CANN)?

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Among the surprising and interesting moves we saw on Thursday, General Cannabis Corp (OTCMKTS:CANN) was one of the most intriguing. We aren’t sure what the catalyst for the 15% jump really was, but the action suggests some potential big bids getting involved. Generally speaking, we can always fall back on the idea that this is a cannabis stock with just 32 million shares rattling around on the float, and call it a day.

But the last time we saw a clear catalyst involved with CANN was three weeks ago, when the company financial results for the quarter ended June 30, 2018. “We broke the $1 million revenue ceiling in the second quarter of 2018, with revenues of $1,114,541, an increase of 34% over 2017. Year to date revenues increased 32% in 2018 over 2017,” said Robert Frichtel, Chief Executive Officer of General Cannabis. “Our Operations segment continues to find opportunities from the expansion of legalized cannabis in numerous states, our Security segment is gaining traction in California, and Chiefton’s apparel business is achieving broader, national success.”

General Cannabis Corp (OTCMKTS:CANN) bills itself as a company that provides services to the regulated cannabis industry in the United States. The company engages in the acquisition and leasing of cultivation space and related facilities to licensed marijuana growers and dispensary owners; and provision of security services, including on-site professionals, video surveillance, and cash transport to licensed cannabis cultivators and retail shops.

CANN also designs, distributes, and sells apparel featuring graphic designs; and offers consulting services to the cannabis industry that comprise obtaining licenses, compliance, cultivation, logistical support, facility design, and building services. In addition, General Cannabis Corporation provides shared office space, networking, and event services; and leases cultivation equipment and facilities.

Next Big Crop joined General Cannabis as a subsidiary in 2015 to offer consulting services for the cultivation, processing and sale of cannabis. Another division, Chiefton Supply Co., designs and manufactures high-quality, customized apparel and clothing for businesses in the cannabis industry, while Chiefton Design creates and develops branding packages for companies. Iron Protection Group is a subsidiary of General Cannabis that provides security services to enterprises within the cannabis industry. On December 21, 2017, General Cannabis signed a two-year contract worth $955,000 to manage a cultivation facility in California, representing the largest single contract the company has ever secured.

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As discussed above, the stock ripped higher on a gap and go move on Thursday with no obvious or direct news catalyst to drive the action. Overall, the chart shows 26% during the past month in terms of shareholder gains in the stock, but this action is running counter to the larger trend in the name.

Moreover, the name has registered increased average transaction volume recently, with the past month seeing approaching 130% above the average volume levels in play in this stock over the longer term.

“I am confident that breaking the $1 million quarterly revenue level in the second quarter is a proof of concept for our ability to be the comprehensive national resource to the regulated cannabis industry. Our access to capital, our strong balance sheet, and our infrastructure expertise allow us to partner with companies throughout the industry while positioning us to continue to expand through acquisitions,” said Michael Feinsod, Executive Chairman of General Cannabis.

“We are ready to explore investments and acquisitions of companies in the regulated cannabis industry. Our team of experts will respond quickly to serious inquiries. Access to capital and thought leadership is difficult in the cannabis industry. Our proven track record of integrating entrepreneurial cannabis start-ups and positioning them with the resources and capital needed to succeed, however, is working.”

Now commanding a market cap of $118.11M, CANN has a significant war chest ($10.2M) of cash on the books, which is balanced by about $3.3M in total current liabilities. CANN is pulling in trailing 12-month revenues of $4M. In addition, the company is seeing major top-line growth, with y/y quarterly revenues growing at 33.7%. This may be a very interesting story and we will look forward to updating it again soon. Sign-up for continuing coverage on shares of $CANN 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 $CANN, either long or short, and we have not been compensated for this article.

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