CannaBusiness Group, Inc. (OTCMKTS:CBGI) Begins the New Week with Cheer
CannaBusiness Group, Inc. (OTCMKTS:CBGI) opened the new week on a very positive note, running on pure momentum in the days that may lead up to a new financial results announcement. The growth and volumes were even stronger on Monday, leading the price up more than 73% to $0.36, on dollar volumes of $15.5 million. 
CBGI has not received new publicity for now, but marijuana stocks often last a few days as investors’ enthusiasm is already kindled enough. And given that CBGI is looking still practically flat in the longer term perspective, there is the possibility of a stronger run, especially with the buying records in the past days. Investors’ forums remain rather skeptical, though, as the bubble conditions are visible to anyone, in general and pertaining to particular stocks.
What is worrying about CBGI is the long record of issuing shares to cover either debt or plans of development. While the OTC landing page lists just 109 million shares outstanding, there are enough past issues below market value, held by lenders or other parties. We cannot track where those shares remain, so there is always danger of selling when the prices are high enough. Even at the curent positions, it would be lucrative to sell, especially as the promotion from early March invited new buyers. The next few days will show if the trend and the buying interest survives.
The financial report also includes a worrying slump in sales, from $1.4 million to 950,000, and a corresponding slide in net results, as loss deepened from 178,000 in 2012 to $926,000 until September 2013.
Yet the stock market is oriented toward the future of the company, and for now, whatever is linked to marijuana sales is deemed to have a shot at windfall sales. But the first new reports of cannabis companies show very little development, as the legalized market is still rather new, and some of the companies don’t even have direct sales or even dispensary licenses- those would be expected some time in the future.
Monday came in with careful optimism for another strong gainer that reflects the moods in the cannabis sector- TerraTech Corp. (OTCBB:TRTC). While this greenhouse company still has no direct marijuana revenues as well, its stock price is doing extremely well, gaining again toward its recent peak around $1.30.
Creative Edge Nutrition, Inc. (OTCMKTS:FITX) also inches up, but it is early to say if it could break the flatness from the past weeks. The ticker may break the 10-cent level again, as it ended the day at $0.0929.
If you like CBGI now, it is best to be aware that the trend upward is rather old, and the company holds enough red flags to create commotion in the near future. Though more PR and emails may renew the climb, it is still best not to rely too much on upward momentum.
