General Cannabis Corp (OTCMKTS:CANN) showed exceptional performance in a sector-wide growth, however, it is notable to assess here is that the irrespective of a capital surge, the balance sheet of firm remains weak. It implies that its valuation of $125 million is not well-supported by fundamentals.
General Cannabis equity witnessed remarkable up move during the election period this year. The firm, formerly known as ‘Advanced Cannabis Solutions’ and sited in Colorado, offers various services to the expanding industry, comprising security, advisory, apparel, supplies, real estate and branding. The equity did record strong up move, but it has plunged from the high of $5.19. It should be noted that it has surged more than 570% from level of $0.77 seen on August 31, 2016.
For stockholders who made money from their trades, analysts suggest that trades should be closed regardless of the recent drop of 28% from the high point. They are predicting the equity to go even lower in the imminent months. This cautious approach on the stock can be linked to the notable capital raised by firm.The capital generation noted in recent period, which was confirmed in an 8-K filing, can be the reason for the stock price drop.
General Cannabis raised $3 million via the release of warrants and promissory notes, with sum of $550,000 used to close prevailing debt and the amount indicating new funding. It has interest of 12% and is set to mature in 2019. The firm released 4.5 million warrants and 4.5 million warrants priced at $0.75 and $0.30, in that order. It presently has 15.6 million shares due, hence the 9 million warrants will boost the float rather considerably.
Also, with higher trading volumes, the 9 million warrants imply more than 10 times the count of traded shares daily on average in the preceding month.
Marapharm Ventures Inc. (OTCMKTS:MRPHF) gave timelines for Las Vegas project that was confirmed in PRs issued on November 14 and November 23, with updates followed on December 4 and December 6, 2016. The CEO, Linda Sampson, expressed that they are overwhelmed with the developments in marijuana industry. Almost 50 million adult visitors come to Nevada every year, which shows considerable growth prospects.