Since our last review of General Cannabis Corporation (OTCMKTS: CANN) on April 7, 2017, the stock continued on its downward trend to a low of $1.12 on Jun 8, 2017. The stock bounced off of the low of the sustained downtrend, and made a strong upward move to $2.26 Jun 16, 2017. It has since traded in a range between $2.10 and $1.56, where it is currently trading and is approximately a 61% retracement from the June 16th bounce.
Whether or not this is the beginning of a sustained reversal remains to be seen. The Company recently reported some positive financial results for the first quarter of 2017 which may turn out to be the catalyst for a reversal.
First, some background on the Company for those that are not familiar with the it. General Cannabis Corp is the comprehensive resource for the highest quality services available to the regulated cannabis industry. The Company is a trusted partner to the cultivation, production and retail sides of the cannabis business. The Company does this through a combination of strong operating divisions such as security, marketing, operational consulting and products, real estate and financing. As a synergistic holding company, the various divisions are able to leverage the strengths of each other, as well as a larger balance sheet, to succeed. General Cannabis now operates in Arizona, Arkansas, California, Colorado, Maryland, Massachusetts, Nevada, New York, Oregon, Pennsylvania, Vermont, and Washington.
On June 09, 2017 General Cannabis Corp announced the acquisition of GC Finance Arizona, LLC from Infinity Capital West, LLC for $106,001. GC Arizona owns 50% LLC membership interest in DB Products Arizona, LLC (“DB Arizona”), and a secured promissory note with DB Arizona in the amount of $825,000, plus accrued interest.
DB Arizona produces and distributes medical marijuana infused products in the state of Arizona. DB Arizona began production in the fourth quarter of 2016. During the first quarter of 2017, gross revenues for DB Arizona were approximately $194,000. DB Arizona has significant excess production capacity at its 14,000 square foot state of the art commercial kitchen and infused products manufacturing facility. Executive Chairman of General Cannabis Corp Michael Feinsod commented:
“We are excited to announce the purchase of GC Finance Arizona, LLC. We look forward to working with our partners to introduce and produce the highest quality infused products for the medical marijuana industry in the state of Arizona. Closing on this milestone expands our public company platform and further diversifies our revenue stream, which will create significant shareholder value.”
On the financial front, the latest quarterly financial reports for the period ending March 31, 2017, the company reported a 4% increase in total revenues when compared to the quarter ended March 31, 2016. During the first quarter of 2017, the company’s Operations segment, Next Big Crop, increased revenues by 119% over the first quarter of 2016. Offsetting this increase, the Security division experienced a 16% decrease in revenue, because of a decline in wholesale cannabis prices in Colorado, and the company’s preference to work only with well-capitalized clients and not overextend credit to security clients. The Company reported Net Income at $2,171,815, and cash reserves of $407,000. Current market capitalization stands at $33.26 million, on 20.92 million shares outstanding as of August 3, 2017.
General Cannabis Corp expects revenues to continue to grow in the second quarter of 2017. The company is also currently evaluating opportunities in all areas of regulated cannabis. General Cannabis is well positioned to help businesses expand rapidly. As the trend towards state regulated marijuana continues to accelerate, the Company will continue expanding operations into additional states where cannabis becomes legal. The company is already working with clients in Arkansas, Arizona, California, Maryland, Nevada, and Pennsylvania as they respond to new voter mandates. Next Big Crop has the skills and experience to assist operators and investors as they take advantage of regulated cannabis expansion into additional states
General Cannabis Corp is now showing growth in revenues. If this favorable trend continues, it will reflect in the stock price. Upcoming second quarter financial reports will tell the story. We will be updating our subscribers as soon as we know more. For the latest updates on CANN, sign up below!
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Disclosure: We have no position in CANN and have not been compensated for this article.