Cannabusiness Group (OTCMKTS:CBGI) Pushed Further Up
Our previous article on Cannabusiness Group (OTCMKTS:CBGI) came out on February 19 and in it we talked about CBGI‘s explosive start under the new name and ticker symbol. We also commented on their first press release which seemed a bit dodgy.
The PR never mentioned the name of the new CEO and it didn’t even contain the address of their company headquarters. Some of the sentences in the announcement were copied directly from a PR issued by Advanced Cannabis Solutions, Inc f/k/a Promap Corp (OTCBB:CANN) half a year ago and instead of inspiring confidence, the whole thing put some serious question marks around CBGI‘s shareholder communication skills. So, has anything changed since then?
Well, we now know the address of their company headquarters. It’s offered as a virtual office solution.
We also know the name of the new CEO – he is called Michael Cummings and this is his second stint at the helm. He previously held the same position but he resigned when the company changed its name to Muscle Warfare International.
Now he’s back on board and he seems to be working frantically. Just eight days after CBGI entered the marijuana industry, Mr. Cummings completed his first acquisition. The new subsidiary is called NorCal Connection LLC – a small enterprise that owns an e-commerce website through which they sell all sorts of cannabis-related paraphernalia. According to California’s Secretary of State’s website, NorCal Connection operates out of a residential house located in the city of Vaccaville.
This, however, didn’t seem to bother investors at all and, somewhat predictably, the ticker received a rather big push. In a matter of five sessions, CBGI managed to gain no less than 143%. Some corrections followed on Tuesday and Wednesday, but yesterday, it absolutely exploded.
More than 29 million shares changed hands in a matter of six and a half hours of trading meaning that the dollar volume stands at around $2.46 million. The share price soared by a whopping 123% and CBGI closed the day at $0.076 per share. Today, it still seems to be going strong. Less than and hour after the opening bell, it has already broken through the $0.08 barrier and it looks like it will continue running.
The reason for the remarkable jump is a press release according to which CBGI have acquired 17.3 acres of land which is apparently occupied by a licensed medical marijuana producer in California. The deal will be closed by the issuance of restricted stock.
It’s clear that a lot of people are excited and the enthusiasm might actually push the ticker on another remarkable run. Let’s not forget, however, that the market cap is growing by the minute, while the management team have yet to convince us that they’re able to make a significant impact on the marijuana industry. Currently, we have very little information on the new business and only the future financial statements can give us a better outlook.
That’s why, despite all the excitement and hype, you should carefully weigh the risks of a potential investment before putting any money on the line.
