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Tuesday, December 1, 2020

Can General Cannabis Corp (OTCMKTS:CANN) Storm Back Higher?

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A former high-flyer in the cannabis space that has recently sparked a ton of new volume and a key test of support is General Cannabis Corp (OTCMKTS:CANN). You may remember when we saw this stock rocket from about a buck to ten bucks per share in just about six weeks. Since then, we have seen sideways and downside action, with most of those gains given back. But this is still potentially an interesting story and we wanted to circle back around to update our take.

The story is more interesting once again following recent news of an investment in Consolidated C.R., a Puerto Rico limited liability company. According to the release, “The Company is investing $375,000 in the form of a convertible promissory note, bearing interest at 12%, collateralized by virtually all of the assets of CCR, with a term of 18 months.  The Company has a 90 day option to convert $250,000 of principal under the note into a 10% equity ownership in CCR.”

General Cannabis Corp (OTCMKTS:CANN) trumpets itself as a company that provides products and services to the regulated cannabis industry in the United States.

The company operates through four segments: Security and Cash Transportation Services (Security), Marketing Consulting and Apparel (Marketing), Operations Consulting and Products (Operations), and Finance and Real Estate (Finance).

The Security segment advanced security services, including on-site professional and cash transport to licensed cannabis cultivators and retail shops, as well as security services to non-cannabis customers in the hospitality business.

The Marketing segment provides designing, branding, and marketing strategy consulting services to the cannabis industry; and designs and sources client-specific apparel and products. This segment offers t-shirts, hats, hoodies, and accessories through an online shop, as well as cannabis retailers, and specialty t-shirt and gift shops.

The Operations segment provides consulting services to the cannabis industry that comprise obtaining licenses, compliance, cultivation, retail operations, logistical support, facility design and construction, and expansion of existing operations.

The Finance segment engages in the acquiring and leasing of cultivation space and related facilities to licensed marijuana growers and dispensary owners. This segment also offers shared office space, networking, and event services; direct term loans and revolving lines of credit; and customized finance, capital formation, and banking services.

The company was formerly known as Advanced Cannabis Solutions, Inc. and changed its name to General Cannabis Corp in June 2015. General Cannabis Corp was incorporated in 2013 and is headquartered in Denver, Colorado.

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As noted above, CANN just announced an investment in Consolidated C.R., a Puerto Rico limited liability company.

CANN has had a rough past week of trading action, with shares sinking something like -6% in that time. That said, chart support is nearby and we may be in the process of constructing a nice setup for some movement back the other way.

Over the past month, shares of the stock have suffered from clear selling pressure, dropping by roughly -22%. What’s more, the listing has seen a jump in recent trading volume to the tune of 26% over what the stock has registered over the longer term.

“This investment marks the continued expansion of our finance division, dedicated to supporting entrepreneurs’ success in regulated cannabis markets,” said Michael Feinsod, Chairman and CEO of General Cannabis.

“Having known members of the CCR team from working in Colorado, Oregon, and Nevada, we are eager to support, and potentially partner, in the Puerto Rico cannabis market.”

At this time, carrying a capital value in the market of $69.55M, CANN has virtually no cash on the books, which is balanced by about $6.2M in total current liabilities. One should also note that debt has been growing over recent quarters. CANN is pulling in trailing 12-month revenues of $4.6M. In addition, the company is seeing major top-line growth, with y/y quarterly revenues growing at 48.1%. This is an exciting story, and we look forward to a follow-up chapter as events transpire. 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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