United Cannabis Corp (OTCMKTS:CNAB) has been one of the top performing cannabis stocks of 2016. CNAB traded around the $.25 level during the summer months and then exploded in October as investors get set for Green Rush 2.0 just around the corner. Come election day, voters in at least nine states will decide on whether to legalize either the recreational use or the medical use of marijuana. As it stands now, those states include Arizona, Arkansas, California, Florida, Maine, Massachusetts, Montana, Nevada and North Dakota.
So far, 25 states have established medical marijuana programs. These states include: Alaska, Arizona, California, Colorado, Connecticut, Delaware, Hawaii, Illinois, Maine,Maryland, Massachusetts, Michigan, Minnesota, Montana, Nevada, New Hampshire, New Jersey, New Mexico, New York, Ohio, Oregon, Pennsylvania, Rhode Island,Vermont, and Washington. In addition, Washington, DC and Puerto Rico allow medical marijuana for patients.
Additional states, while not offering comprehensive medical marijuana programs, have approved marijuana- based “low THC, high cannabidiol (CBD)” products for limited medical purposes. These states include Alabama, Florida, Georgia, Iowa, Kentucky, Louisiana, Mississippi, Missouri, North Carolina, Oklahoma, South Carolina,Tennessee, Texas, Utah, Virginia, Wisconsin, and Wyoming.
Alternatively, CBD oil products that are derived from hemp are legal to purchase and use in all 50 states without a visit to a doctor, a medical marijuana card, or paying a state enrollment fee. Made with naturally high-CBD, low-THC hemp, these products contain the same levels of CBD as those sold in medical marijuana dispensaries, but because they are sold as supplements, they are 100% legal in the U.S.
United Cannabis Corp’s Prana Bio Medicinal products provide patients a way to mix/match cannabinoids for therapeutic purpose. These products, licensed to regulated marijuana dispensaries, are broken into 5 categories that are available in capsules, sublingual’s, and topical delivery methods. The Company uses a patent-pending infusion process utilizing select fatty acids, lipids, and specific combination of cannabis derived terpenes to increase bioavailability.
The latest news from the company is that it signed a a Memo Of Understanding with A Puerto Rican Health Management Company, whereby United Cannabis will make available its proprietary Prana formulation, delivery methods, software and professional network, sufficient to launch a complete cannabis based product and support facility for the country of Puerto Rico. Prior to this announcement, CNAB partnered with Cherubim Interests Inc (OTCMKTS:CHIT) to design, construct and deploy mobile extraction laboratories to service the cannabis sector. The companies expect to begin construction and assembly of the laboratories in the coming weeks, and should begin shipping the first units by year-end.
Last month, CNAB expanded its product offering through the manufacture and marketing of CBD-rich hemp-based formulations for administration via cartridges for use in vaporizers. Management anticipates cartridge production will begin by year-end, initially with the Company’s terpene-enhanced CBD vape pen formulation. New formulations are expected to follow shortly thereafter. The Company has purchased Convectium’s state-of-the-art 710Shark v.5 Concentrate Filling Machine and System to facilitate production.
Furthermore, its 50% Joint Venture with Jamaica-based Cannabis Research & Development has initiated a pilot program in collaboration with the Rastafari Studies Centre for Cannabis Research, University of West Indies, Mona, to establish protocols for the development of Ital Standards which will be used as a guide for the processing, cultivation and consumption of cannabis. UCANN/CRD will work in collaboration with the Rastafari Studies Centre (the “Centre”) to support the activities of the DHAPA Association in accord with their broader objective of establishing an infrastructure for licensed Rastafari farmers and trainees to participate in the Jamaican marijuana industry.
CNAB also has a Memo Of Understanding with the Megan Strong Foundation regarding a number of projects, including the production and distribution of the United Cannabis-branded Prana Bio Nutrient Medicinals products, in New Brunswick, Canada. The Memo calls for a number of activities, including the establishment of The Megan Strong Foundation Natural Healing Centre, which will go on to host a research lab facility and operate an ACT Now Center. All operations will be conducted in accord with the guidelines of the Tobique Compassionate Use Act.
Under the terms of the Memo, the Company will provide its resources and experience to create the operating business plan as well as contribute to the financing and investments necessary to execute the project. The Megan Strong Foundation will provide the facilities and contribute staff and other resources necessary for the building and operation of the Healing Centre. Once the Healing Centre is completed, the companies intend to work together to produce and distribute the Company’s Prana Bio Nutrient Medicinals and establish an ACT Now facility to service patients in Canada’s Aboriginal communities, as well as creating a research laboratory.
Currently trading with a market cap of $92 million, CNAB has been busy signing deals left and right. The company has been one of the most active cannabis names in terms of partnerships and putting out press releases. This steady stream of PRs has helped keep the stock running and investors excited about the company’s prospects. Further helping the stock is that it’s a low floater with just 10.6 million shares held at DTC.
In looking at the latest quarterly financials ending June 30, we see $197k in revenues, a net loss of $128k, $9k in cash, $168k in total assets, and $2.5m in total liabilities. If CNAB wants to maintain its current market cap, the company needs to greatly boost its revenues, income and balance sheet. We have also seen a lot of insider selling recently as insiders cash in on this run. Investors need to weigh the pros and cons with respect to CNAB. In the short run, investor enthusiasm over marijuana will keep a bid in the stock. Longer term, the company needs to improve its fundamentals. We will be updating our subscribers as soon as we know more. For the latest updates on CNAB, sign up below!
Disclosure: We have no position in CNAB and have not been compensated for this article.