Cannabis Science Inc (OTCMKTS:CBIS) has been a fun one to watch and trade among the old guard members of the cannabis patch. We were bearish on this stock for most of last year, but turned bullish on it in late October, marking quite good timing if we do say so ourselves. However, the company has recently put out a series of PRs that begin to strain credulity a little, with its latest perhaps worthy of some mental red flags.
After superficially hitching its wagon to the cryptocurrency meteor a week ago, the company has just put out word that “it has established a Construction Project Management Team (CPMT) to work closely with its Security Team (CBISST) to coordinate and support the Company’s aggressive growth initiatives, which include the establishment of a number of CBIS Pharmacies in Los Angeles and eventually nationwide, as well as CBIS Medical Centers that will facilitate the Company’s direct interaction with its patients.” Importantly, please note that this is a company with no cash on hand and over $2.3M in current liabilities sitting on the balance sheet. We can’t seem to figure out how an announcement of a series of large fixed cost investments is plausible here. That doesn’t mean it won’t be followed up by some new announcement on financing deals, but it seems a little unlikely, and is probably why the stock traded lower on this news.
Cannabis Science Inc (OTCMKTS:CBIS) defines itself according to the narrative of a leading-edge researcher and designer of cannabinoid solutions to health problems.
CBIS is involved in developing medicines for autism, blood pressure, cancer and cancer side effects, as well as for other illnesses comprising for general health maintenance. It also develops CS-TATI-1 for newly diagnosed and treatment-experienced patients with drug-resistant HIV strains, as well as those intolerant of available therapies; CS-S/BCC-1 to treat basal and squamous cell carcinomas; and a proprietary cannabis-based therapy for neurological conditions.
In addition, CBIS offers an online video-based medical cannabis education system, including courses, such as medical cannabis law, medical marijuana, cooking, horticulture, and bud tending; and manufactures and distributes specialty horse and pet grooming and topical applications. It has a license agreement with Apothecary Genetics Investments LLC to produce various brand formulations for California medical cannabis market.
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As noted above, the quality of the communications from CBIS has begun to sour a little, culminating with its latest press release, which seeks to purport a coming wave of “a number of CBIS Pharmacies in Los Angeles and eventually nationwide, as well as CBIS Medical Centers that will facilitate the Company’s direct interaction with its patients.”
“The CBIS CPMT will have overall planning, coordination, and control responsibilities for CBIS projects from initiation to completion,” stated Mr. Raymond C. Dabney, CBIS’ President, CEO, and Co-founder. “CPMT will manage and help ensure the functional and financial viability of our projects. With the construction industry experts we have on our CPMT, as well as the experienced security professionals on our CBISST, we expect our plans to build and expand CBIS Pharmacies and Medical Centers throughout California and the U.S. to be streamlined, secure, and completed on-time and within budget.”
This company has been spotty on credibility in the past and may be hurting that factor more here by announcing such a grandiose vision with no cash, lots of debt, no sales activity, and a poor track record as a “business”. In any case, we will switch this view if we see viable evidence of some serious financing plans to make what seems like a pipe dream even close to reality going forward.
Earning a current market cap value of $278.7M, CBIS has virtually no cash on the books, which is balanced by about $2.3M in total current liabilities. CBIS is pulling in practically nothing in terms of trailing 12-month revenues, and even that small amount has been falling. We will update the story again soon as developments transpire. Sign-up for continuing coverage on shares of $CBIS stock, as well as other hot stock picks, get our free newsletter today and get our next breakout pick!
Disclosure: we hold no position in $CBIS, either long or short, and we have not been compensated for this article.