Cannabis-RX, Inc. (OTCMKTS:CANA) Burned After Promotion
Despite its size, the pump for Cannabis-RX, Inc. (OTCMKTS:CANA) produced rather underwhelming results. After a few days of tentative buying, Monday saw CANA sold off to the tune of $693,000, or nearly 750 thousand shares. CANA slid down a bit, losing more than 12% to $0.96. Despite the new smallcapinvestment1 email, CANA seems to be lost, and the chances of enthusiasm growing are slim. 
CANA started its promotion at the beginning of the new week, expecting to buck the pessimistic trend that started in the beginning of April. Unfortunately, Monday’s trading did not bring proof that the market is suddenly cheerful again. Among marijuana stocks, even the most actively traded barely broke the $5 million dollar volumes barrier. And the Marijuana index sank a further 10% on the day, the majority of tickers in the red, with significant double-digit losses as deep as 40%.
What CANA did well was change its name and ticker relatively fast- while in essence remaining a real estate company, as its previous name, Longview Real Estate,Inc., suggests. Thus, CANA has picked the relatively risk-free promise of securing real estate tailored to the needs of the legal cannabis sector.
So far, investors’ opinions are split between a general pessimism on the sluggish price action- and the potential for the price to gap upwards, as the company revealed a significant debt-fueled budget for its marijuana adventure. The worrying influence of the stock pumps was also taken into account.
Otherwise, the financial padding of CANA is comparatively robust, with:
- $2.18 million cash
- $4.3 million total current liabilities
- $255,614 net loss
- $8.07 current assets, including receivables
So far, CANA has only been revving its engines, accumulating promissory notes with the potential to be converted into shares. The company has not been digging a hole of losses for itself, despite the lack of revenues. So far, CANA unrolled just 154 million shares out of 1.5 billion authorized shares- but there is the trouble of the unknown free float, and the low daily volumes. It’s also paradoxical why in the latest filing CANA points out it is a development stage company, when in essence it shows certain activities and even risk-taking in the field of real estate.
What is even stranger is that despite the cheerful news for $30 million in financing, CANA posted a going concern phrase in its filing, saying that its accumulated loss of $368,000 may expand soon.
In the end, the plainest story may be that CANA has arrived too late into the game. Discovery Minerals, Ltd. (OTCMKTS:DSCR) had a similar idea of linking its property buying arm to the legal marijuana sector. This helped the stock move from its rock- bottom prices, but for a few days, it has remained stuck around $0.003.
Despite the high price, Advanced Cannabis Solutions, Inc. (OTCMKTS:CANN) did not become a star with its real estate ideas. CANN was suspended for a few days, and later tanked on panic selling, leaving the $30 range and sinking toward $11.90. This did not stop CANA in its turn from linking to an analysis touting the potential of real estate operators.
If you are indeed hooked onto the longer-term potential, it is best to be aware of the disproportionate rise in prices, and avoid sinking too large funds into companies doomed to crash.
