Wednesday, June 29, 2022

Technicals and Fundamentals Converge for Cannabis Science Inc (OTCMKTS:CBIS)

Cannabis Science Inc (OTCMKTS:CBIS) has been correcting in recent action but put in an interesting technical signal on March 27, when the stock dipped below the $0.075 level, but then closed well back above the level the following day, transacting over 40 million shares over the combined two-day stretch. That’s known as a “pivot low”, and represents a good signal about the larger-money bid in place for the stock right now.

The company has made two announcements in recent days to help foster that trailing bid: First, the company announced that it has substantially increased its production for its self-medicating patient product line distributed through cannabis dispensaries in California. Second, the company announced that Ms. Julia Royall, whom the company calls a “leader of global health information”, has been appointed to the Scientific Advisory Board of CBIS.

Cannabis Science Inc (OTCMKTS:CBIS) has been down an interesting road over recent months. We see the company as actively striving for, and achieving a bump in legitimacy through some of its newly established relationships.

The company defines itself according to the narrative of a leading-edge researcher and designer of cannabinoid solutions to health problems.

CBIS is involved in developing medicines for autism, blood pressure, cancer and cancer side effects, as well as for other illnesses comprising for general health maintenance. It also develops CS-TATI-1 for newly diagnosed and treatment-experienced patients with drug-resistant HIV strains, as well as those intolerant of available therapies; CS-S/BCC-1 to treat basal and squamous cell carcinomas; and a proprietary cannabis-based therapy for neurological conditions.

Cannabis Science Inc also has collaboration with IGXBio, Inc. to develop GenePro, a DNA-based immunotherapeutic drug.

In addition, CBIS offers an online video-based medical cannabis education system, including courses, such as medical cannabis law, medical marijuana, cooking, horticulture, and bud tending; and manufactures and distributes specialty horse and pet grooming and topical applications. It has a license agreement with Apothecary Genetics Investments LLC to produce various brand formulations for California medical cannabis market.

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CBIS also commented that they are moving to meet the “outstanding influx of self-medicating patient requests” as it highlighted Moonlight Cannabis as its Newest Spotlight Dispensary for the Month of April 2017.

“Moonlight Cannabis has now received most of Cannabis Sciences’ newest developed products. We have just received the newest batch of our CBIS MDI Inhaler just in time for this spotlight announcement and look forward to feedback from customers of Moonlight Cannabis about this new product. The CBIS MDI Inhaler is now in stock in a few more California dispensaries and has become a sleeper success with the public. We are having serious issues trying keeping enough in stock. We are providing wholesale opportunities as well and this creates an even greater demand for the Inhaler and of course, this is a happy problem!”

The company also noted that its transdermal patches are coming onto the market. “The CBIS Transdermal Patches are about to hit the market and we are very excited to see the numbers coming in, emails, phone calls, and word of mouth all coming in daily anticipating the release of the CBIS Pain Patch. Final packaging for the CBIS Pain Patches is being completed now and will roll out to dispensaries in the Los Angeles area very soon.”

This series of announcements appears to have put in a near-term pivot low in the stock around the $0.075 level. That’s now the level to trade against for those looking at this stock on the long side. Bears will be looking for the stock to eat that tail and flush orders below. Of course, the technicals only determine the short-term outcome distribution for a stock like CBIS. In fact, current fundamentals aren’t really the key either. The key is in what can be reasonably expected of the market opportunity in cannabis given the legislative issues that lie ahead as well as the huge influx of competition we have seen grow up over recent months in the space.

At this time, carrying a capital value in the market of $195.4M, CBIS has virtually no cash on the books, which stands against about $2.1M in total current liabilities. One should also note that debt has been growing over recent quarters. CBIS is pulling in very nominal trailing revenues, and seeing those decline on a sequential and y/y basis. We will update this one again as new information comes into view. For continuing coverage on shares of $CBIS stock, as well as our other hot stock picks, sign up for our free newsletter today and get our next hot stock pick!

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