Cannabusiness Group, Inc. (OTCMKTS:CBGI) Marches On Thanks To Marijuana Hype
Prior to February 14 the company Cannahusiness Group, Inc. (OTCMKTS:CBGI) was firmly placed deep into the double zero price ranges. Back then they were operating under the name Muscle Warfare Inter and were developing sports nutritional products. At the end of the third quarter of 2013 revenues were sitting above a million and things were shaping up for a better 2014.
Well, a few months later and everything has changed. At the end of December the CEO of the company Daniel Amato stepped down from his position and took with himself all the operating subsidiaries – Muscle Warfare, Cibexo and Fizogen. Left without a business the company decided to undergo its sixth name and ticker change since 2006 and headed towards the most talked-about industry at the moment – medical marijuana.
On the first day that traders realized the switch in operations they pushed the stock upwards by 451%, starting from $0.003 and closing the day at $0.0149. Since then thanks to a couple of exciting PRs CBGI has been able to keep interest and optimism high and the stock is climbing higher and higher.
As we informed you in our previous articles CBGI acquired the e-commerce business of The Norcal Connection LLC. followed a week later by the acquisition of 17.3 acres for medical marijuana cultivation.
We were wondering what the financial state of the company was after the change and yesterday we got our answer. CBGI filed the annual report for 2013 and issued a corresponding PR announcement. According to the report CBGI finished the year with:
- $17 thousand cash
- $1 million total current assets
- $3 million total current liabilities
- $1 million revenues
- $816 thousand net loss
Do note that the numbers for the revenues and net loss are exactly the same as the ones from the previous quarterly report because the past CEO Mr. Daniel Amato would not provide the needed financials for the last quarter of 2013.
Still, having such low cash reserves and a massive working capital deficit should have put investors on their toes but the exact opposite happened – CBGI jumped by another 14% yesterday, nearly tripled the traded volume from Tuesday and closed at $0.093. Part of the positive outcome is certainly due to the PR that revealed CBGI‘s intentions to become a fully reporting company within the next six months.
Seeing the meteoric rise in stock price exhibited by the marijuana stocks at the start of the year has caused numerous other pennystocks to migrate to the industry. Many of them offer bright predictions for the future while at the same time have no current operations. CBGI may look promising but its rather frequent change of business and limited financials demand a lot of due diligence before putting your money on the line.
Yesterday both Growlife, Inc. (OTCBB:PHOT) and Medical Marijuana, Inc. (OTCMKTS:MJNA) suffered corrections. PHOT dropped by 8% and closed at $0.505 following an impressive string of five consecutive sessions in the green. MJNA on the other hand is finding it a lot harder to form a positive trend, losing 5% and ending the day at $0.322.