mCig Inc (OTCMKTS:MCIG) Sell-Off Presents A Buy Opportunity

Unwarranted political rhetoric has had a negative impact on cannabis stocks in recent months. mCig Inc (OTCMKTS:MCIG) is one of the stocks that has seen its sentiments among investors take a hit, triggering a sell-off that cannot be attributed to deteriorating performance.Fundamentals that had pushed the stock to highs of $0.43 are still intact. While the stock has dipped substantially, we remain bullish about its prospects. Just like in our previous update, mCig is a candidate for long-term value on political rhetoric from the Trump Administration cooling off.Growing revenues, cash on balance sheet and capital raise should continue to provide the company the much needed financial flexibility to pursue its goals. The result should be increased investor confidence in the stock which should see the share price ticking higher.Price Action The stock has already bounced back from the $0.20 handle and is showing signs of rising to the $0.25 handle. A close above the $0.25 handle should open the door for the stock to make a push for the $0.30 mark, above which mCig should resume its long-term uptrend. MCIG Daily ChartSell-offs in the short term should be limited to the $0.20 handle, which appears to be a key support level, below which the stock could drop to 52-week lows of $0.12.Before we look at the factors and developments likely to serve as catalysts in pushing the stock higher let’s have a little background about mCig.MCig casts itself as a diversified holding company with operations in the legal cannabis industry. The company offers consulting services on matters pertaining to cultivation of cannabis as well as the construction of greenhouses.It also services the industry through lifestyle brands made up of Rollies, Vapolution, and VitaCig.Expansion DriveOne of the reasons why remain upbeat about mCig prospects has to do with the aggressive expansion drive that has allowed the company to target more key markets, in pursuit of additional revenue streams.Through its Grow Contractors division, the company has signed an exclusive management contract with a client in Palm Springs as it continues to expand its footprint in California. Pursuant to the agreement, the company has gained access to an 8,000 square feet facility that it plans to use for ethanol extraction.The company expects gross profits of up to $10 million a year from the facility, which should see 8% of the net profit going to Grow Contractors.

“This facility is the first of our conquest in California,” commented Rob Kressa, CEO of Grow Contractors Inc. “The next facilities in Sacramento and Los Angeles will be coming online very soon with much more to follow. We are humbled and incredibly excited about the abundance of those interested in our services.”

In addition, has set its eyes on the rapidly growing CBD Pet products industry as part of an effort that seeks to diversify revenue streams. The company has appointed Dr. Arcady Uryash to spearhead its efforts as it looks to come up with products for the $60 billion industry.For Starters, the company intends to come up with CBD pet skin products as well as delivery methods for targeting pet owners in the industry. The products and delivery accessories are to be available nationwide and are to compete against veterinarian and other CBD products.

“CBD-based pet products are seeing heightened demand across the globe. Trial studies have shown that CBD oils can help reduce anxiety, inflammation, and chronic pain while boosting the pet’s immune system,” said Mr. Uryash, MD, Ph.D. at Biomedical Research Institute, Mt Sinai Medical Center.

Capital RaiseCapital needed to finance the expansion drive and the launch of CBD pet products won’t be an issue. The company is currently exploring licensing opportunities in California, Nevada, and Oregon and has already raised more than $1 million.Sales GrowthMCig continues to register robust sales growth, mostly through its California packaging division. Late last year’s its supply division signed an agreement with one of the largest cannabis brand valued at $1 million.Thanks to the introduction of recreational cannabis in California, the company projects $3 million worth of sales from cannabis supply products. For its first 2018 fiscal quarter, mCig recognized sales of $3.1 million translate to net sales of $400,000. Taking into considerations the deals the company has signed in the recent past, it should be able to surpass its first-quarter performance that was somehow impressive given the net profit of $77,953.What Does the Future Hold for mCig? Despite underperforming in the stock market, mCig is shaping up to be an attractive prospect at current trading levels. Very few companies in the industry can match its solid financial position supplemented by solid growth prospects. The recent sell-off in our view presents a unique entry point in a stock with huge upside potential.Disclosure: We have no position in MCIG and have not been compensated for this article.