General Cannabis Corp (OTCMKTS:CANN) is a stock we suggested a couple weeks ago that you keep an eye on as a turnaround candidate in the cannabis patch. Since that time, on seemingly no new catalysts, we have seen this stock go into a strong momentum move higher. Shares are now up 90% over the past month of action. This is a small float play, with under 15 million shares rattling around on the open market, and that likely has something to do with the momentum we are seeing here, along with some general strength in the space. However, the company’s recent financial data also likely have something to say about the action.
According to the company’s release, “For the three months ended September 30, 2017, we reported our highest quarterly revenues on record of approximately $980,000, representing an increase of 21% in total revenues when compared to the three months ended September 30, 2016. Total revenues for the nine months ended September 30, 2017, increased 15% when compared to the nine months ended September 30, 2016.”
General Cannabis Corp (OTCMKTS:CANN) trumpets itself as a company that provides services to the regulated cannabis industry in the United States. The company engages in the acquisition and leasing of cultivation space and related facilities to licensed marijuana growers and dispensary owners; and provision of security services, including on-site professionals, video surveillance, and cash transport to licensed cannabis cultivators and retail shops.
CANN also designs, distributes, and sells apparel featuring graphic designs; and offers consulting services to the cannabis industry that comprise obtaining licenses, compliance, cultivation, logistical support, facility design, and building services. In addition, General Cannabis Corporation provides shared office space, networking, and event services; and leases cultivation equipment and facilities.
According to company materials, “General Cannabis Corporation is the comprehensive resource for the highest quality service providers available to the regulated Cannabis Industry. We are a trusted partner to the cultivation, production and retail side of the cannabis business. We do this through a combination of strong operating divisions such as real estate, consulting, security, financing and the distribution of important infrastructure products to grow facilities and dispensaries. As a synergistic holding company, our subsidiaries are able to leverage the strengths of each other, as well as a larger balance sheet, to succeed.”
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As noted above, CANN shares have been riding a difficult trend over the past 10 months. But the company just reported potentially reassuring financial data trends for its recent quarter, particularly on the top line.
CANN shares have been on fire, ripping higher in recent action following strong financial data out of the company in its latest 10-Q. The broader cannabis space has been red hot over the last couple months, which likely accounts for some of this action. But, it seems clear that we are seeing something of a rebirth of interest in this former central player in the cannabis patch.
We’ve witnessed in excess of 100% piled on for shareholders of the name during the trailing month, but this action is running counter to the larger trend in the name. The situation may be worth watching. CANN is a stock who’s past is littered with sudden rips. Moreover, the stock has registered increased average transaction volume recently, with the past month seeing greater than 360% above the average volume levels in play in this stock over the longer term.
This is particularly important with the stock trading on a float that is relatively small at just 14.7M shares. As savvy traders are well aware, a restricted trading float and a jump in trading volume can crimp supply and push share prices higher.
Currently trading at a market capitalization of $50.7M, CANN has a store ($253K) of cash on the books, which stands against about $2.7M in total current liabilities. One should also note that debt has been growing over recent quarters. CANN is pulling in trailing 12-month revenues of $3.3M. In addition, the company is seeing major top-line growth, with y/y quarterly revenues growing at 20.9%. You can bet we will update this one again as new information comes into view. Sign-up for continuing coverage on shares of $CANN 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 $CANN, either long or short, and we have not been compensated for this article.