CannaBusiness Group, Inc. (OTCMKTS:CBGI) In Relentless Self-Promotion
If there is a hot new business model, it is almost sure this pink sheet company would try it. This is what finally brought us to the name of CannaBusiness Group, Inc. (OTCMKTS:CBGI), as the company scurries to comply with filing requirements and promise a fast entrance into the legal cannabis sector. CBGI has risen on a mix of promotions and PR, and on a generally weak Thursday bucked the trend of falling pot stocks, adding more than 40% to $0.131 on dollar volumes of $3.62 million.
The latest PR from the company outlines the general rising trend in the market, underlining the success of several active tickers. The particular news around CBGI would be the attempt to file financial results, first on the OTC landing page, then by SEC compliance standards. This may help us see if CBGI is equipped to take on the model it has chosen- to buy and lease agricultural and other properties aimed at the medical cannabis sector.
The latest data we could find, for 2013 and excluding the last quarter, reveal that CBGI holds:
- $17 thousand cash
- $1 million total current assets
- $3 million total current liabilities
- $1 million revenues
- $816 thousand net loss
At least according to the company’s PR, those reserves have helped to purchase a 17-acre property with a marijuana grower tenant. The given price is more than $275,000, and will be paid for with restricted shares and cash. Speaking of shares, BCGI has doctored its share structure several times, including a significant 2000-for-one reverse split. The company increased the share numbers again more modestly in 2014, with a 3-for-one split, to show a relatively modest 109 million shares outstanding- though little about this business justifies the current market cap above $13 million.
In its choice to operate land leases, CBGI recalls the way Discovery Minerals Ltd. (OTCMKTS:DSCR) switched from mining to marijuana. DSCR claims to have a land owning subsidiary that could help it build a portfolio of California agricultural properties. DSCR also had the benefit of a very low price, so it managed to triple its value in a day, though afterward went through a few more turbulent sessions, to settle at $0.0023.
CBGI was also mentioned side by side with Petro Tech Oil and Gas (OTCMKTSLPTOG), which also found real estate to be the key to marking itself “pot stock”. PTOG rose sevenfold in the last month, to $0.07, as it received wider publicity.
New opportunities in the cannabis sector mean the chance for extremely strong days that may invite speculative investments. But CBGI looks like it holds too many red flags, so it is best to be aware that the spike was almost wholly caused by artificial promotional efforts. Avoid trusting the upside potential of this stock unless you can afford the correction- or crash that could follow.