General Cannabis Corp (OTCMKTS:CANN) On A Bull Run

General Cannabis Corp (OTCMKTS:CANN) has been lighting up the charts as the stock goes on another bull run. CANN has exploded from the $.75 support level to trade around $1.60. This is the second major bull run for the stock this year. In March and April we saw CANN climb from the $.40 level to hit almost $2. With $1.95 as the next target objective in sight, is there enough momentum behind CANN to breakout and deliver big profits?First up, a little background on the company. General Cannabis Corporation describes itself as "the all-in-one resource for the highest quality service providers available to the regulated Cannabis Industry. We are a trusted partner to the cultivation, production and retail side of the cannabis business. We do this through a combination of strong operating divisions such as real estate, consulting, security, financing and the distribution of important infrastructure products to grow facilities and dispensaries. As a synergistic holding company, our subsidiaries are able to leverage the strengths of each other, as well as a larger balance sheet, to succeed."General Cannabis touches many aspects of the cannabis industry. Iron Protection Group provides advanced security, including on-site professionals, video surveillance and cash transport, to licensed cannabis cultivators and retail shops. Chiefton Supply is an apparel and design company. GC Supply is a re-seller of supplies to the cannabis market. Next Big Crop delivers comprehensive consulting services to the cannabis industry that include obtaining licenses, compliance, cultivation, logistical support, facility design and building services. CANN also operates The Greenhouse, a 16,056 square-foot former retail bank, which serves as the largest shared work space for entrepreneurs, professionals and others serving the regulated Cannabis Industry.Last week, the company closed on a $3.0 million private placement transaction with various private parties including existing note holders of the Company. The Company issued $2.8 million of senior secured promissory notes and an aggregate of 8,400,000 warrants to purchase common stock. The notes bear interest at 12% per annum and are secured by all of the Company’s assets. The proceeds of this debt raise will be used primarily to fund the Company’s expansion, repayment of existing mortgages, senior secured debt, and for working capital. CEO Robert Frichtel said:

“This debt raise will allow us to deliver increased value to our shareholders. We are managing our cost of capital through these transactions and creating a significant amount of working capital to continue our acquisition strategy in the marijuana industry. The impact of replacing existing debt and this new capital is exceptional. It positions General Cannabis to continue its strategy of acquiring emerging companies in the cannabis space. With this transaction, we consider ourselves well capitalized to take advantage of the many opportunities that we see emerging in the near future.”

In August, CANN reported revenues for the three months ended June 30, 2016 of $701,942, a 64% increase over the $427,202 in revenues for the same period in 2015. General Cannabis’ total revenues in the first half of 2016 were $1,394,054, compared with $484,059 in the same period last year. This represents a 188.0% increase.

General Cannabis reported a diluted loss per share of $0.09 in the second quarter ended June 30, 2016, an improvement of $0.22 per diluted share when compared to a loss of $0.31 per diluted share in the second quarter of 2015. General Cannabis’ diluted loss per share in the first half of 2016 was $0.17, compared with a diluted loss per share of $0.38 in the same period last year, an improvement of $0.21 per share. CEO Robert Frichtel said of the quarter's results:

“We are encouraged by the distinct improvement in our revenues in the second quarter. During 2016, we have been focusing on developing our acquired businesses, as well as working on new initiatives. Our service revenues continue to grow significantly, driven by strong growth in our Next Big Crop division and Chiefton. A number of factors worked in our favor in the second quarter, including strong consulting revenue and a sales lift in our apparel business in particular. We are pleased that a number of sales-driving initiatives put in place in recent months are beginning to gain traction. In the third quarter, we expect a significant increase in our General Cannabis Supply division and are well positioned across our operating divisions for additional organic growth through 2016. We continue to refine our marketing skills and are preparing some new initiatives for the fall, and are actively exploring new regulated markets."

What could drive CANN over the $2 level is industry tailwinds. According to a report from a cannabis analytics firm New Frontier and Arcview Market Research, sales of recreational pot shot up 184% year over year, up to $998M in 2015 from $351M in 2014. Colorado and Washington state were responsible for a lot of the industry’s growth, the report said. Colorado tax revenue and recreational sales is predicted to be $135M for 2015, a 77% hike from $76M in revenue in 2014. Washington pulled in $70M in tax revenue. Come November, the states of California, Nevada, Arizona, Massachusetts, Maine, Rhode Island and Vermont are all expected to decide on recreational legalization this year. Florida, Ohio, Missouri, and Pennsylvania will vote on medical legalization in some form.

Currently trading with a market cap of $24 million, CANN is one of the few pot stocks producing real revenues based on a solid business plan. With $3 million in fresh funding and marijuana initiatives on the November ballot, the bull run in CANN could just be getting started. We will be updating our subscribers as soon as we know more. For the latest updates on CANN, sign up below!

Disclosure: We have no position in CANN and have not been compensated for this article.