CANNAGROW HLDGS IN COM USD0.001 (OTCMKTS:CGRW) is a micro-cap stock that has been one of the stronger plays in the Fall cannabis-patch run. The company is a play on the overall growth in the space. If you want to get in the game, you get in touch with these guys and they help you with every phase of the game. In the present marketplace, with an established record and a pretty strong top line, this has a chance to turn into something more than just a pre-vote squeeze play.
Recent action has seen a pullback of about -20% taken out of the listing during the trailing week. Market participants may want to pay attention to this stock. CGRW is a stock whose past is littered with sudden rips. Furthermore, the listing has registered increased average transaction volume recently, with the past month seeing a bit less than 150% beyond its prior sustained average level Traders should note this as important given the stock’s extremely small trading float of 25.7M shares. This type of thing is something to watch out for: ramping trading activity can overwhelm available supply in a stock with this type of small float, leading to an upward burst in prices.
CANNAGROW HLDGS IN COM USD0.001 (OTCMKTS:CGRW) trumpets itself as a company that provides solutions to the cannabis industry in the State of Colorado.
The company has entered the Medical/Recreational Cannabis Industry as a Lessor, Liaison, and Consultant to licensed Growers providing them with turnkey Growing Facilities in the State of Colorado. The Company intends to expand this business model within this industry as business opportunities evolve whereby providing for the highest return to its shareholders.
The company was formerly known as BizAuctions, Inc. and changed its name to CannaGrow Holdings, Inc. in November 2014. CannaGrow Holdings, Inc. is based in Las Vegas, Nevada.
According to company materials, “CannaGrow Holdings, Inc. does not and will not, until such time as Federal law allows, grow, harvest, distribute or sell marijuana or any substance that violate the laws of the United States of America. CannaGrow Holdings, Inc. has entered the Medical/Recreational Cannabis Industry as a Lessor, Liaison, and Consultant to licensed Growers providing them with turnkey Growing Facilities in the State of Colorado. The Company intends to expand this business model within this industry as business opportunities evolve whereby providing for the highest return to its shareholders.”
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As the reader is no doubt aware, Nov. 8 saw California’s Proposition 64 passed, making California the largest state to legalize marijuana for recreational use.
According to a recent release, “the 62-page law, formally known as the Control, Regulate and Tax Adult Use Act, or the Adult Use of Marijuana Act, allows up to one ounce of marijuana flower or eight grams of cannabis concentrates for adults 21 and older, the personal cultivation of up to six marijuana plants and the industrial cultivation of hemp. The recreational use California marijuana market is estimated to reach $35 billion by 2020 based on Colorado economic growth predictions.”
We also saw voters in Massachusetts and Nevada pass recreational legalization, while Florida, North Dakota, and Arkansas stepped up to approve medicinal initiatives.
As we run the numbers, the combined estimated legal marijuana markets for these states is in excess of $2 billion, with the total market surpassing $7 billion this year and potentiall as much as $40 billion by 2020.
Mr. Janovec, CannaGrow Holdings, CEO, states of a recent deal related to the company’s principal asset, “NuGro Industries, the Landowner and Developer for the Colorado Buffalo Ranch Facility I in Huerfano County, has submitted a Purchase Order to the International Greenhouse Company for three additional 2,880-sq. ft. Ranger Series 2000 Heated Greenhouses. The construction of these additional greenhouses will complete Phase I & II of the facility and provide an additional 8,640 sq. ft. of production capacity, bringing the total square footage of the Grow Facility to 23,580 sq. ft.”
Now commanding a market cap of $163.3M, CGRW has almost no cash on the books, along with total assets topping $270K, which must be weighed relative to an appreciable load ($2.47M) of total accumulated debt.
The company is pulling in some strong revenues, but everything is going to be about market share here. During an aggressive growth phase, a turnkey solution provider is exactly what works. However, that type of story needs to seize the day bigtime and rake in a ton of cash like a squirrel saving up acorns before the winter. Then it needs to evolve when new business licensing slows down, which it will. This is a good play for this phase, but management still has to prove itself. We will check back on it soon. For continuing coverage on shares of $CGRW stock, as well as our other hot stock picks, sign up for our free newsletter below and get our next hot stock pick!