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CBD has Bottomed… What to Do Now (CVSI, GCGX, CWBHF, TRTC, MJNA)

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The CBD industry has been one of the hardest hit market segments over the past 18 months. But the long-term structural growth trend continues to look robust. The disconnect is about supply. There was a glut as tons of pretenders and frauds purported to have a viable model. The bear has done its job and shut most of them down.

Now, in the aftermath, with the undergrowth burnt up in the fire, the survivors could be set to run with the structural theme still intact. That provides investors with an impetus to being to pick up the pieces off the floor and possible score big wins with a speculative mindset.

With that in mind, we take a look at some of the most promising names still standing, and expanding, as the new dawn pushes back above the horizon for CBD stocks.

 

CV Sciences Inc (OTCMKTS:CVSI)

CV Sciences Inc bills itself as a company that operates two distinct business segments: a drug development division focused on developing and commercializing novel therapeutics utilizing synthetic CBD; and, a consumer product division focused on manufacturing, marketing and selling plant-based CBD products to a range of market sectors.

At one point, this was the poster child for the space, ramping to over $7/share before being toppled by a Citron bear research piece related to intellectual property. It remains an interesting opportunity, but demands some extra due diligence.

The stock has suffered a bit of late, with shares of CVSI taking a hit in recent action, down about -5% over the past week. But action around the $0.45/share zone will be telling. Thus far, the stock appears to be signaling potential for a “higher low”, which suggests a longer-term bottom was put in place in March and a new upside phase is being cemented into place as fresh capital flows crowd onto the bid.

A break about the 50-day MA (around $0.54) would be a major signal.

 

Global Consortium Inc. (OTCMKTS:GCGX)

Global Consortium Inc. (OTCMKTS:GCGX) owns Indulge Oils (www.indulgeoils.com), a cannabis distillate which is currently being manufactured and marketed in California.

The company is also building America’s First Cannabis Mall in Sacramento, CA which when completed will house Manufacturing, Distribution, Delivery, Retail, Testing, and Cultivation all under one 64,000 square foot building. The Mall will house the largest Manufacturing facility of THC and CBD Distillate and Edibles believed to be operational in the United States. Global Consortium has leased 25,000 Square feet of the building with a purchase option, the Company is working to secure a first right of refusal for the remaining 39,000 square feet.

Indulge Oils is a premium “pesticide free” product sought after brand as it is known for its purity and high quality. Indulge Oils produces clean and pure oils that do not contain any residual particles, are non-toxic and non-carcinogenic. This is why Indulge Oils commands a premium for its oils and cartridges. Global Consortium, Inc. executed a 5-year lease with an option to purchase 25,000 square feet in Sacramento, CA.

Global Consortium Inc. (OTCMKTS:GCGX) is currently also expanding into the state of Florida.

There has been substantial progress in California with licensing and permitting. They are now ready to do full manufacturing for the Indulge Oils line. Dwyer also announced that GCGX will begin working Florida on a new CBD line, the upcoming elimination off all remaining convertible debt, and what is next for GCGX in 2020.

 

Charlotte’s Web Holdings Inc (OTCMKTS:CWBHF)

Charlotte’s Web is perhaps the most established leader in the space in terms of the North American CBD market. The company makes 100% hemp-based cannabidiol wellness products, including CBD hemp oils, capsules, topicals, and pet products that feature CBD hemp oil extracts.

CWBHF hasn’t really done much of anything over the past week, with shares logging no net movement over that period. Shares of the stock have powered higher over the past month, rallying roughly 27% in that time on strong overall action.

Charlotte’s Web Holdings Inc (OTCMKTS:CWBHF) managed to rope in revenues totaling $30.1M in overall sales during the company’s most recently reported quarterly financial data — a figure that represents a rate of top line growth of 6.4%, as compared to year-ago data in comparable terms. In addition, the company has a strong balance sheet, with cash levels far exceeding current liabilities ($88.9M against $38.2M).

 

Terra Tech Corp (OTCMKTS:TRTC)

Terra Tech trumpets itself as a vertically integrated cannabis-focused agriculture company. The company operates in two segments, Herbs and Produce Products; and Cannabis Dispensary, Cultivation and Production.

TRTC has had a rough past week of trading action, with shares sinking something like -5% in that time. That said, chart support is nearby and we may be in the process of constructing a nice setup for some movement back the other way. Over the past month, shares of the stock have suffered from clear selling pressure, dropping by roughly -8%.

Terra Tech Corp (OTCMKTS:TRTC) pulled in sales of $10.3M in its last reported quarterly financials, representing top line growth of 48.3%. In addition, the company is battling some balance sheet hurdles, with cash levels struggling to keep up with current liabilities ($1.2M against $27.6M, respectively).

 

Medical Marijuana Inc (OTCMKTS:MJNA)

Medical Marijuana Inc bills itself as an investment holding company that operates in the medical marijuana and industrial hemp markets.

The company has been one to chronically overpromise and underdeliver, so it warrants caution. Management has been claiming big revenues for many years. Yet the stock has kept trending lower and the company refuses to move off the pink sheets or start producing audited financial data.

Those, taken together, represent some important red flags. MJNA may be best left alone despite its claims of powerhouse progress. In addition, the company is battling some balance sheet hurdles, with cash levels struggling to keep up with current liabilities ($6.5M against $10.8M, respectively).

 

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