For those involved in the cannabis patch micro-cap space over recent years, you’ll recognize the name, United Cannabis Corp (OTCMKTS:CNAB). This is a stock that has been up and down a number of times, occasionally flavor of the week, and it looks like the stock was du jour on Tuesday, rallying well over 30% on a TTM volume high to new ytd price per share highs with a bang and a bullet. The catalyst was awfully easy to track down: the company just announced it has been contracted to provide a single customer with its hemp-derived CBD isolate oil for a period of 100 weeks.
This is important because, according to the release, “the fair market value of the agreement is estimated to be between $30 to $42 million, based on mutually agreed-price adjustments. The CBD isolate will be processed at the Company’s 14,300 square foot, state-of-the-art extraction facility in Mead, Colorado.”
United Cannabis Corp (OTCMKTS:CNAB) promulgates 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.
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.
It also develops Epidiferphane, a therapeutic for the prevention of the negative side effects of chemotherapy, as well as therapeutics for the management of rheumatoid arthritis and treatment of brain cancer.
According to company materials, “United Cannabis Corporation is a biotechnology company dedicated to the advancement of cannabinoids for medical applications and is building a platform for designing targeted therapies to increase the quality of life for patients around the world. The Company develops, produces and distributes proprietary cannabis-centric products and technologies, including its patented product brand, Prana Bio Nutrient Medicinals, and has established a strong presence in the hemp-derived CBD market, with state-of-the-art grow, processing, testing and production facilities in Colorado and South Carolina. United Cannabis also licenses its intellectual properties relating to the legalized growth, production, manufacture, marketing, management, utilization and distribution of medical and recreational marijuana and marijuana-infused products. Most importantly, United Cannabis is always driven by its underlying mission to help people in pain.”
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As noted above, CNAB just announced it has been contracted to provide a single customer with its hemp-derived CBD isolate oil for a period of 100 weeks.
Traders will note 72% piled on for shareholders of the company during the trailing month. Furthermore, the company has seen interest climb, with an increase in recent trading volume of a bit over 290% over what the stock has registered over the longer term.
Earnest Blackmon, CEO of United Cannabis, noted, “This is our second material agreement since launching our Mead facility in June, validating our move into hemp production and processing. Together, these agreements represent seven times the revenue we reported in 2018, and we are still only at a fraction of our existing capacity.”
At this time, carrying a capital value in the market of $37.5M, CNAB has a chunk ($450K) of cash on the books, which is balanced by about $6M 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 $11.4M. In addition, the company is seeing major top-line growth, with y/y quarterly revenues growing at 1557.1%. As more color becomes clear on the name, we will review the situation and update our take. 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.