Wednesday, June 29, 2022

CV Sciences Inc (OTCMKTS:CVSI) A Show of Technical Health

CV Sciences Inc (OTCMKTS:CVSI) is a micro-cap name that has grabbed hold of the attention of traders during the stock’s progression up the price ladder of late. We covered this one recently, and wanted to update our bullish outlook as the stock breaks higher on rapidly expanding volume.

The breakout is significant because of its technical nature. In our experience, OTC stock technicals can be extremely telling. When you see something close above major moving averages on expanding volume and no new press releases, it is very often a sign of insider purchase activity. We are only speculating here, but it stands to reason, particularly given the likely expanded pie we are about to see where the Cannabidiol market is concerned.

CV Sciences Inc (OTCMKTS:CVSI) frames itself as a life science company, focuses on developing and commercializing novel therapeutics utilizing synthetic Cannabidiol (CBD).

CVSI operates two distinct business segments: a drug development division focused on developing and commercializing novel therapeutics utilizing synthetic CBD; and, a consumer product division in manufacturing, marketing and selling plant-based CBD products to a range of market sectors, including nutraceutical, beauty care, specialty foods, and vape.

Following the CanX Acquisition in December 2015, CV Sciences commenced its preclinical drug development program during the second quarter of 2016. The Company’s drug development efforts include pursuing synthetic-based Cannabidiol drug candidates in areas that have potential to provide significant improvements in therapeutic patient treatments with sizable addressable markets.

The company was formerly known as CannaVEST Corp. and changed its name to CV Sciences, Inc. in January 2016. CV Sciences, Inc. has primary offices and facilities in Las Vegas, Nevada and San Diego, California.

CVSI is led by Michael J. Mona, JR. founder of CV Sciences, Mr. Mona possesses over 30 years of senior management experience in a range of industries including real estate/construction, industrial farming, chemical processing and consumer products. Mr. Mona is a recognized industry leader in hemp farming operations and chemical extraction and has established a global supply chain of hemp-derived products.

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CVSI is another in a series of stocks we have recently explored that share a common set of attributes proving to be deadly for those betting on declines: the company has exposure to cannabis/marijuana into the November 8 voting and the stock is seeing sharply expanding volume on a very small float.

There it is: 450% more volume than the long run average heading into competition over just 9.17 mln shares, as we approach a likely major bullish catalyst that may see a full tripling of the legal cannabis segment in the US – that’s the golden recipe right now for major growth in share values.

Beyond that, the Company just put out an in-depth shareholder communique that further reinforces the bull case around this name, such as its big push to capture market share in the treatment of smokeless tobacco addiction.

The Company discussed its multi-billion market opportunity presented by a new drug candidate that comes in the form of a proprietary chewing gum that combines synthetic CBD and nicotine to effectively treat smokeless tobacco addiction. CVSI execs put this as a $5.3 bln opportunity.

Shareholders were also pleased to see that the Company’s aggressive bearing is not waning as we approach the Cannabis industry footprint expansion: the Company’s CBD Consumer Division has grown from 120 retail locations to now over 700 locations.

Interest in United Cannabis is growing rapidly, and as we near the November ballots the spotlight will shine heavily on the industryCurrently trading at a market capitalization of $19.9M, CVSI, has over $1.4 mln in liquid cash or cash equivalent assets on hand, which is offset by an appreciable load ($2.33M) of total accumulated debt. Revenues are considerable and growing, at over $12 mln on a trailing twelve month basis. That completely eradicates any sense of concern over the debt level in our book. That said, we would like to see more potent growth on the top line than the meager 3% posted last quarter. However, we know the available customer base is going to expand in a few weeks, when 4 states head to the voting booth to decide on medical marijuana laws for their states. So that growth may already be a part of the equation right now. Find out when $CVSI reaches critical levels. Subscribe to Right Now by entering your Email in the box below.

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