Wednesday, June 29, 2022

United Cannabis Corp (OTCMKTS:CNAB) a Volatile Penny Stock

United Cannabis Corp (OTCMKTS:CNAB) has been enduring the wild gyrations seen in many members of the cannabis patch in the aftermath of the huge and historic vote on November 8, during which nine different states posed a question to their electorates on the desirability of greater legality for pot in America, and eight of them answered with an emphatic “Yes!”

For many stocks in the related market space, the period into that vote was characterized by dramatic upside. And for nearly all of them, the period that followed has been characterized by sweeping profit-taking and a filtering-out process during which investors are coming to understand more about the real value of each on a case by case basis. CNAB is a story that is still unfolding, though recent data on revenue growth paints an interesting picture, as we shall see below.

United Cannabis Corp (OTCMKTS:CNAB) bills 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.

It also provides consulting and product placement services related to marijuana industry. 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.

CNAB has strategic partnerships with WeedMD RX Inc.; Harborside Health Center; and Westside Enterprises, LLC. The company also has a production and placement agreement with Jason Emo and Emotek LLC; licensing and exclusive distribution agreement with DNA Holding, LLC; and consulting and licensing agreement with Marcus Richardson.

The company was formerly known as MySkin, Inc. and changed its name to United Cannabis Corporation in May 2014. United Cannabis Corp was founded in 2007 and is based in Denver, Colorado.

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According to the company’s press materials, “The Company’s Prana Bio Medicinal products provide patients a simple, safe, accurate, and easy way to mix/match cannabinoids for therapeutic purpose. These products, licensed to regulated marijuana dispensaries, are broken into 5 categories that are available in capsules, sublingual’s, and topical delivery methods. The Company uses a patent-pending infusion process utilizing select fatty acids, lipids, and specific combination of cannabis derived terpenes to increase bioavailability. Prana Bio Medicinal products are NON-GMO, ethanol free, alcohol free, glycerin free, gluten free, 100% naturally derived, chemical-free, solventless, and hypoallergenic.”

Recent action in this stock has seen 16% added to share values of the company over the past week of action, a bounce that has taken root amid largely bearish action over the post-vote period, during which the stock has given up about 60%. The situation may be worth watching. United Cannabis Corp has a track record that includes a number of dramatic bounces. In addition, the stock has benefitted from a jump in recent trading volume to the tune of topping 320% beyond what we have been seeing over the larger time frame.

This is particularly important with a float in play that’s relatively small — roughly 10M shares. One is wise to respect the dynamic this may create — ramping trading activity can overwhelm available supply in a stock with this type of small float, leading to an upward burst in prices.

Now commanding a market cap of $60.3M, CNAB has very little cash on the books, which compares with an appreciable load ($931.98k) of total accumulated debt. This is a somewhat troubling balance sheet, but that drawback is mitigated by recent financial data showing a clear trend toward accelerating growth.

To wit, according to recent 10-Q data, CNAB is making real money, with trailing revs already coming in at $734.59k. In addition, the company is starting to see major topline growth, with quarterly y/y revs increasing at 98%. All in all, CNAB is a story still being written. But it is certainly one worth reading as new chapters unfold. We have covered this one closely, and we will track the company’s next strategic steps as they are taken. For continuing coverage on shares of $CNAB stock, as well as our other hot stock picks, sign up for our free newsletter below and get our next hot stock pick!

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