CV Sciences Inc (OTCMKTS: CVSI) strength in the market is one that shows no signs of exhaustion. The stock has held steady throughout the year, even as the broader cannabis sector felt the full force of short selling pressure. In contrast, the stock continued to spike high at the back of solid fundamentals and improving operational efficiencies.
CV Sciences Price Analysis
After turning bullish at the start of the year, the stock rallied by more than 600% to record highs of $9.20 a share. While the stock has pulled back to the $5 a share handle, all indication is that this was a minor correction.
The stock has already started bottoming out of a tight trading range, of between $3.50 and $5. Robust sales growth, as well as the signing of strategic partnerships, are the latest catalysts strengthening the stock’s sentiments in the street. The unveiling of the industry’s first Hemp extract GRAS Self-Affirmation has also reaffirmed the company’s prospects in the multi-billion hemp business.
CV Sciences is currently trading in a steep uptrend as pullbacks emerge as potential buy opportunities. After pulling back from the $7 a share handle, the stock faces immediate resistance at the $6 a share level. A breach of the resistance level should open the door for the stock to rally back to its 52-week high.
On the downside, the stock faces immediate support at the $4 a share handle, a breach of which could see the stock plunging to the $3 a share handle, the next support level.
In our view, CV Sciences remains well-positioned to finish the year on a high given that the overall industry has turned bullish, supporting further movements on the upside.
About CV Sciences
CV Sciences is a life sciences company that operates under two main segments Specialty Pharmaceuticals and Consumer Products. Under the Specialty Pharmaceutical unit, the company develops and commercializes products utilizing synthetic Cannabidiol. The consumer product division specializes in manufacturing and selling of plant-based CBD products.
GRAS Designation Milestone
After a period of consolidation on skyrocketing to record highs, CV Sciences has once again served yet another catalyst that continues to strengthen investor confidence in the stock. The company’s gold extract that includes PlusCBD Oil Gold Formula has received the Generally Recognized as Safe (GRAS) status from the Food and Drug Administration.
The accreditation is an important milestone as it recognizes the company’s bid to invest in the scientific evidence necessary for such designation. CV Sciences becomes the first company to obtain GRAS designation on a hemp extract.
“We are committed to building consumer confidence and trust in the safety and quality of our products, supported by scientific evidence. This milestone significantly advances our leadership in this space and provides us with opportunities to broaden consumer access to our products, while removing any doubts on the safety and benefits of our products,” said Joseph Dowling, Chief Executive Officer at CV Sciences.
Expanding Product Line
The GRAS Designation comes weeks after the company unveiled PlusCBD Oil Gummies as it continues to expand its product line. The latest addition comes in two tasty flavors of Cherry Mango and Citrus Punch.
The new addition to the existing line of leading hemp extract products attests to CV Sciences commitment to innovation on its PlusCBD Oil product line. The new products should allow the company to target a broader target market at a time of growing demand for marijuana products.
Amidst a flurry of activities on the strengthening the company’s long-term prospects, CV Sciences still has to navigate the choppy class action waters. The company is the subject of class-action lawsuits over claims it provided materially false or misleading statements.
The allegations stem from suggestions that the company failed to notify investors that the US Patent office had turned down its patent application for leading candidate drug CVSI-007. The company is also accused of overstating the commercial viability of the candidate drug.
The company has since refuted the claims.
“We believe that any claims alleging violations of securities laws by the Company are without merit and we intend to defend our position vigorously,” stated Joseph Dowling, Chief Executive Officer of CV Sciences.
CVSI just opened a new 45,500 square foot facility will expand the Company’s capacity for hemp CBD oil production, warehousing and fulfillment by more than 500 percent to meet growing retailer and consumer demand for PlusCBD™ Oil products. The facility, located in San Diego, is expected to be operational in the fourth quarter of 2019 and will support CV Sciences’ U.S. and international expansion opportunities.
This follows the announcement on July 10 whereby CV Sciences commenced its domestic hemp sourcing initiative, including a commitment to more than 500 acres of U.S.-based hemp production for 2019. This new supply of U.S. produced hemp-based CBD will be extracted through CV Sciences’ domestic supply chain partners and refined at the Company’s San Diego production facilities, broadening the Company’s global supply chain and raw material supply while reducing transportation and logistics costs.
What Next For CV Sciences
CV Sciences is among the very few stocks that have remained steady and continued skyrocket throughout the year. A 600% spike attests to growing investors’ confidence about the stock’s long-term prospects.
A recent pullback in our view presents an exciting buy opportunity given that the stock has shown it has what it takes to continue powering high at the back of solid fundamentals.
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Disclosure: We have no position in CVSI and have not been compensated for this article.