United Cannabis Corp (OTCMKTS:CNAB): A Player In Medicinal Cannabis

The United Cannabis Corporation (OTCMKTS:CNAB) has been at the forefront of medical cannabis research in the United States since its legalization in major states.The company has recently received a go-ahead by the Jamaican government to produce and distribute Prana CBD-infused water in the country as medical cannabis through its subsidiary, Cannabinoid Research & Development Limited ("CRD") and is well in the process of beginning clinical trials for its novel drugs.This presents a good upside investment story for investors looking to invest in CNAB. The company’s share price trend is seen in the charts below: CNAB Daily ChartThis article will review the stock, assessing its potential upside based on its strategy and financial performance. We want to bring out our view on the benefits accruing to an investor investing in this stock for either the short or long term.Having said this, it is important for us to briefly review the company for readers with rudimentary knowledge of its operations.United Cannabis Corp: An OverviewCNAB was founded on November 15, 2007, as a California corporation under the name MySkin, Inc. MySkin was engaged in the business of providing management services to a medical spa in Los Angeles, California which provided various advanced skin care services until March 31, 2014, when this business was sold to the former President of the Company.In early 2014, the management decided to exit the medical spa management business and change our focus to creating unique products which can be used to treat a wide range of diseases that can be used by patients globally. Company’s Chief Executive and Chief Technologies Officers have been involved with medical cannabis since it was permissible in California in 1999, turning their focus to Colorado during the infancy stage of legalizing medical cannabis in 2009.With the benefit of more than 30 years’ combined experience, United Cannabis has accumulated an extensive knowledgebase across the spectrum of the cannabis industry, including engineered facilities, security, regulatory compliance, genetics, cultivation, good manufacturing practices (GMP), proprietary extraction methods, branding, retail operations (SOP), marketing and wholesale distribution.The company has progressively grown a database of patients’ information (over 15,000 patients to date) which has enabled them to use their products to make tailor-made products based on their novel cannabis extraction technology and drugs. They have built, over the recent past, a strong research base that has enabled them patent over 25 new products in 2017.In the near term, the company plans to use these product patents to obtain revenues from licensing them to third parties (2 companies are already onboard) as they work towards achieving their long-term strategy of producing their own drugs, which are currently in their clinical trial stage, to support their revenue base into the distant future.Current Successes and StrategiesCNAB is currently harnessing the power of its subsidiaries to grow its revenues as well as reach its strategic goals. With the good news in Jamaica allowing them to begin production and distribution of its products, CBD-infused water, through Caribbean Research & Development Limited ("CRD"), their bilateral partner company. Production was expected to commence in October 2017. This is a first step towards CNAB creating a global brand as well as increasing their revenues in the long term.Earnest Blackmon, Chief Executive Officer of United Cannabis, commented on the announcement saying:

"Acceptance of medical cannabis has been considerably faster in Jamaica than the United States, and we established CRD so that we could be a part of the commercialization process. Our production facility is state-of-the-art and we expect our CBD-infused water, as well as our other approved products, will be ready for distribution by the end of the month."

Source:Through their subsidiary, Prana Therapeutics Inc, they expect to broaden their foundations in plant-based drug development. This will be done through their novel drug, Epidiferphane^TM which helps on chemotherapy, inflammations and brain tumors. CNAB has poised this drug as a revolutionary drug that will help solve some of the problems associated with these problems and is investing a lot in it.Moreover, in their long-term plans, CNAB plans to begin phase I trials at West Indies University in Jamaica which will be financed by licensing of their Pana product lien to manufacturers in the legal US territories through legal, consulting and financial services. They will further go to phase II and III through global partnerships as the one stipulated above.With the above, CNAB is investing in its future growth with prospects being positive. The drugs are seen to be revolutionary and will grow both the cannabis drug industry as well as CNAB as a whole.Their growth potential versus finances.Their positive story is, however, overridden by their financial situation. During the period till June 30 2017, CNAB made revenues of $164,000, a drop from $189,000 in the previous quarter. Management attributed this reduction to the changeover in the production process utilized by the affiliate licensee whereby they had automated the system to ensure it met the forecast future demand.Moreover, this was further exacerbated by the increase in their net loss position from $815,000 to $2,098,000. This was also attributed to stock options granted to their directors and officers valued at $1,512,000, a figure which was expensed during the period.Despite this, the company has a strong futuristic outlook, investing heavily in their research and development, patents and marketing. They expect to invest an extra $2 million in sales and general expenses in the next period with $1 million going to boost their production capacity in their Jamaican subsidiary, $500,000 used to pursue licenses and patent applications and $500,000 used to solidify their agreements for firms which may want to use their patents over the near term. The revenues raised over this period are expected to increase and further add to their financial base from which they will finance their long-term needs.CNAB management believe this will work in their favor as they boost their short-term revenues and profits while growing working towards completion of their clinical trials for their novel drugs and eventual approval by the FDA.ConclusionCNABis using medical cannabis to further grow its revenue base while easing the pain of their patients. The company is positioning itself firmly in the industry and, in the long run, is poised to be a significant player in the cannabis industry. Investment in CNAB will prove beneficial for investors over the next few years.We will be updating our subscribers as soon as we know more. For the latest updates on CNAB, sign up below!Image courtesy of Michel Kotski via FlickrDisclosure: We have no position in CNAB and have not been compensated for this article.