General Cannabis Corp (OTCMKTS:CANN) continues to experience renewed investor interest in the market on the broader cannabis sector turning green and on posting topline sales growth. The sector has underperformed for the better part of the year. However, sentiments in recent weeks have turned positive, fuelling suggestions of an end to a bear run that had gripped the stock.
General Cannabis Price Action
In addition to top line sales growth, General Cannabis has embarked on an aggressive expansion drive that has seen it open offices in the East Coast alluding to growing demand for its offerings. Amidst the recent developments, the stock has bounced back after initially threatening to plunge below the $2 a share mark.
The $2 a share level has since emerged as a critical support level, from where the stock is plotting a turnaround after first half underperformance. The stock is staring at the $4 a share mark, which happens to be a key resistance level. Above the resistance level, the stock should be a bounce-back play on its way to the $6 a share handle.
A breach of the $2 a share handle, on the other hand, will leave the stock susceptible to further declines and could see it edging lower on the continuation of the long-term bear run.
However, given that the company appears to be gaining traction in key cannabis market, chances are very high the stock will continue powering high as the broader industry bounces back.
About General Cannabis
General Cannabis is a cannabis-focused company that provides products and services to the regulated industry. It operates through four segments of Security and Cash transportation Services as well as Marketing consulting and Finance and Real Estate. The company is also a trusted partner when it comes to cultivation, production, and sale of cannabis products.
What Now Door General Cannabis
Price action in recent weeks points to an uptick in upside momentum at the back of high turnover in traded shares. The trigger behind the upside momentum is increased investor confidence in the company’s long-term prospects, especially on the posting of top-line revenue results for the second quarter.
For the first time, General Cannabis broke the $1 million revenue ceiling after reporting a 34% increase in revenues that came in at $1.1 million. The Chief Operating Officer, Joe Hodas, attributes the top line sales results to the company’s ability to provide synergistic solutions that help cannabis businesses realize their growth.
According to the executive, revenue growth underlines the company’s focus on driving sales as well as the quality of the company’s deliverables. The Chairman of the board, Michael Feinsod, on the other hand, believes that access to capital as well as strong balance should allow the company to enjoy accelerated growth through acquisitions.
“I am confident that breaking the $1 million quarterly revenue level in the second quarter is a proof of concept for our ability to be the comprehensive national resource to the regulated cannabis industry,” said Mr. Feinsod.
East Coast Expansion
In an attempt to boost second-quarter growth, General cannabis has already set sights on the East Coast cannabis market in pursuit of additional business opportunities. The company has already opened an office in New York that will serve clients in the region while attracting new talent and partnerships.
According to the executive chairman, they are focusing on the East Coast given that the market is unparalleled with unique opportunities for growth. On the East Coast, the company is planning to expand its security, operations and marketing segments.
“Given our growing list of East Coast clients and the steps that states like Massachusetts and New Jersey have taken toward launching adult-use sales, this is the ideal time for General Cannabis to further invest and establish itself in the region,” said Mr. Feinsod.
What Next For General Cannabis
General Cannabis has started to leverage its years of experience that has seen it become a household name when it comes to providing comprehensive business services in the multi-billion cannabis sector. After a slow start to the New Year, the company appears to have enhanced operational efficiencies if $1 million plus revenues is anything to go by.
Investors appear to have taken note of the company’s operational efficiencies at the back of an aggressive expansion drive if. While the stock is without a doubt a long-term play given the rate at which the company is expanding, the stock needs first to rise and stabilize above the $4 a share mark for any long-term bets.
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Disclosure: We have no position in CANN and have not been compensated for this article.