Cannabis-RX Inc. (OTCMKTS:CANA) Receives a $1.8 Million Pump
Although Cannabis-RX Inc. (OTCMKTS:CANA) decided to join the marijuana industry the first two sessions under the new name and ticker were a real massacre. CANA wiped more than 75% of their value plummeting from an opening price of $4.5 to just 1 dollar.
Since then though the overwhelming enthusiasm around the green plant has been able to sustain that price level and CANA has been fluctuating around the dollar mark. Last Friday they even surged upwards by 15% and returned to $1.10 per share.
Unlike the majority of the recent newcomers to the marijuana sector CANA have been able to amass significant financial resources through promissory notes that in another surprising move don’t feature any conversions into common shares of the company. According to the PR from last week CANA have around $30 million that should go towards their real estate plans for the marijuana industry.
But under the promises for bright future one could find a lot of quite serious red flags associated with the company. Their previous business failed to generate any revenues and the current capital will have to be returned with interest at some point. But now a much more serious concern has emerged with the creation of a landing page touting the company.
Reading the disclaimer at the bottom of the page reveals that the promotion is backed by the rather substantial sum of $1.8 million. Pumps with such large budgets often feature landing pages, email alerts from paid newsletters with some going as far as distributing hard mailers. Of course nobody is going to spend such a sum without expecting something in return.
And wouldn’t you know it according to the same disclaimer third parties own a large amount of CANA shares and are going to sell them. Maybe those people hold the 29.7 million shares (after the 1-for-110 forward split from last July) bought for just $0.0018 when at the moment the stock is trading above a dollar.
The start of the promotion turns CANA into a pumped marijuana stock- one of the riskiest combinations on the market. Just last Thursday the Securities and Exchange Commission (SEC) suspended trading in what was thought to be the most stable and legitimate company in the industry – Growlife, Inc. (OTCBB:PHOT). The suspension was so shocking that it plunged the whole sector downwards with almost all of the companies suffering double-digit corrections. In mid-March the SEC also suspended Petrotech Oil & Gas Inc (OTCMKTS:PTOG), another company that got pumped soon after they too switched to the marijuana. 