CannaBusiness Group, Inc. (OTCMKTS:CBGI) Bounces
The stock of CannaBusiness Group, Inc. (OTCMKTS:CBGI) made a good run in March and hit a peak of $0.417 per share around the middle of the month. Subsequently, however, it made a serious correction and began sliding down on lower volumes.
Most of the sessions for CBGI‘s stock have ended in the red since then and the ticker had lost 70% by the end of Monday’s session, despite the regular press releases the company is making. This isn’t much of a shock considering the massive amount of ventures that have decided to enter the cannabis sector and profit from the hype.
CBGI, however, appears to be doing something and its subsidiary Nor Cal Connection has actual products. Still, while the company is making revenues its annual report for the period ended December 31, 2013 is far from rosy.
- cash: $17 thousand
- current assets: $1 million
- current liabilities: $3 million
- revenues: $1 million
- net loss: $816 thousand
As 99% of the current assets consist of inventory & work in progress one will most probably think that CBGI has a bright future, but for now the company is struggling to become profitable and the expenses to produce revenue are just too big.
Still, on Monday it was announced that the Nor Cal Connection subsidiary has changed its headquarters and warehouse on a new location together in orther to minimize the expenses and improve efficiency. This is good, but it is not quite sure if it will be enough for CBGI to achieve profitability, as only the cost of the goods sold in 2013 is 84% of the produced revenues.
Yesterday’s news that the company has acquired ownership in National Security Solutions, Inc. (an independent security advice and implementation firm), however, was enough for the ticker to make a bounce after a period of descent and make a 30% gain on a $735 thousand dollar volume.
On the other hand, the current market cap of CBGI seems a bit steep, compared to the book value of the company. This isn’t something uncommon for a medical cannabis stock, but it will be pretty good if you do some due diligence before making a pick, because a lot of people might get burned once the marijuana hype settles down.
The biggest jump yesterday was made by AV1 Group, Inc. (OTCMKTS:AVOP) who announced a takeover by Marijuana Incubator Group, Inc. and their stock jumped a massive 600%, despite the fact that the company is a shell whose latest financial filings date back to 2011. mCig, Inc. (OTCBB:MCIG) was another one of the marijuana tickers that made a decent jump yesterday, gaining 18%.
