GB Sciences Inc (OTCMKTS:GBLX) is a pullback play after bouncing back from a recent bear run. After coming under immense selling pressure early in the year, the share price has jumped higher and stabilized above a critical resistance level in what appears to be a reversal in the direction of trade.
The stock has since resorted to its long-term uptrend and could soon make a push for this year’s highs. The expectation is high that the upside momentum will gain pace as investors take note of the company’s push for the first human trial of cannabis-based therapy for Parkinson’s disease.
The stock’s outlook on Wall Street has also received a boost on the company acquiring an exclusive worldwide license for a cannabinoid-based time released Neuropathic pain formula. In addition, the company has signed a letter of intent for the acquisition of a Las Vegas entity with annualized revenues of up to $16 million.
Recent developments appear to have strengthened investor confidence in the stock, seen by a high turnover in the shares traded. The stock has since broken a critical resistance level at the $0.70 mark as it continues to make a push for its 52-week high of $1.56.
The stock needs to rise and close above the $0.90 to reaffirm suggestions that it is on its way back to the top. On the downside, GB Science faces immediate support at the $0.70, below which it remains susceptible to further declines to the $0.50 handle.
A turnaround appears to be in play given that the upside momentum has picked up the pace, an indication that the stock will continue climbing higher
What Does GB Science Do?
GB Science casts itself as a diverse cannabis company, focused on the development of cannabis plant to come up with therapies and treatments for various illnesses. The company strives to come up with medical grade cannabis, cannabis concentrates and cannabinoid therapies through various technologies in plant biology.
Catalysts Behind Recent Price Action
GB Science is the center of attention after filling an Exploratory IND application as it seeks to perform the first-in-human trial of cannabis-based therapy for Parkinson disease. The Exploratory IND program will allow the company to make informed data-driven choices while developing multiple drug compositions and formulations.
The Biopharmaceutical research and development company already has pending U.S and International patent applications covering multiple related PD-formulas based on complex mixtures of cannabinoids and Terpenes.
“GB Sciences has always been committed to providing the highest quality therapies to patients, and working through US FDA channels will allow us to get these medicines to patients across the US and internationally quicker,” said CEO John Poss.
Pain Formulation Licensing
In addition to developing a cannabis-based Parkinson disease treatment, GB Sciences has signed a licensing agreement that provides it with access to a neuropathic pain formulation. The licensing agreement with the University of Seville accords the company with access to intellectual property covering time released cannabinoid formulation.
The nanoparticles in question have already demonstrated the ability to relieve neuropathic pain for eleven days, following a single oral dose in rodents.
“This product could really be a game-changer for patients who suffer from neuropathic pain. We are eager to begin manufacturing these licensed nanoparticles in the US; thus, continuing the development and commercialization of this important therapeutic option,” explained Dr. Andrea Small-Howard, Chief Science Officer of GB Sciences.
NevadaPure’s Las Vegas Operations Acquisition
GB Science has also moved to expand its product line to edibles, oils, and vapes with the signing of a letter of intent for the purchase of 100% ownership interests in NevadaPURE’s Las Vegas Operations. The company is to pay $28 million in cash and assume approximately $5 million of outstanding liabilities for the ownership interests.
The acquisition will provide the company with access to an entity capable of producing over $16 million in annual revenues as it continues to benefit from marijuana adult use legalization in Nevada. The transaction also provides GB Sciences with access to three licenses from the state of Nevada for cultivation and production of marijuana as well as one for running a dispensary.
According to the Chief Operating Officer, Kevin Kuethe the acquisition should strengthen the company’s margins, as the company will no longer have to deal with middlemen.
GB Science 2018 Outlook
After a shaky start to the year, things are starting to look up for GB Sciences. The company has made remarkable strides in strengthening its product line depicted by planned trials for a cannabis-based treatment for Parkinson disease.
The signing of a licensing agreement for a neuropathic pain formulation further underscores the company’s strategy of expanding its product line with assets that have the potential to generate long-term value.
Acquisition of NevadaPURE’s Las Vegas operations should go a long way in strengthening the company’s revenue streams, the key to generating positive cash flow and shareholder value. It goes without saying that the recent bear run has run out of momentum and that the stock looks set to continue climbing higher as GB Sciences keeps firing on all fronts.
Disclosure: We have no position in GBLX and have not been compensated for this article.