If any company should know how to take a hold of its market capitalization by way of well timed news flow, it’s Cannabis Science Inc (OTCMKTS:CBIS). The company is one of the legacy plays in the space, and has both made and lost speculators a lot of cash over the last few years. We’d be hard pushed to find a cannabis company that has lost capitalization over the last few weeks, and for those with impeccable timing, this is a great thing. For the unfortunate majority, however, timing isn’t something that can be relied on, and we know as well as anyone that much of the gains seen in the space in the run up to the November votes are going to dry up as the year draws to a close, if not sooner.
Cannabis Science looked to be approaching the vote in a somewhat steadier fashion than many of its peers; that is, until mid-October, when volume picked up and the gains started to materialize. The basis of the gains was the initiation of a new stream that continues to drive action to-date (a late November dip aside) rooted around some pharmaceutical applications for its technology.
First it was an asthma inhaler, which we’ll get to in a bit more detail shortly. Then cam topical pain administration. As an undercurrent to this, the company footnoted its press releases with the continuing development of its blockbuster programs – HIV/AIDS, oncology (specifically, skin cancer) and an as yet undisclosed neurological condition.
Developments in these arenas was enough to provide a certain level of support and the company is now looking to a fresh round of indications to carry it into the ballot date – fibromyalgia and diabetic nerve pain.
On November 2, Cannabis Science announced the pharmaceutical development of two new medications for pain relief for self-medicating patients with Diabetic Neuropathy Nerve pain and Fibromyalgia. Exactly what announcing the pharmaceutical development means, we don’t really know. We know the company is planning to administer CBD through a transdermal patch, and that CBD has been shown to be effective in reducing pain in this sort of indication in the past. We also know, however, how long it takes to carry something like this through development, and the costs involved.
Now, it may seem like we’re being overly negative here, but the fact is that these press releases don’t really mean much from an intrinsic valuation perspective.
This said, here’s the upside – the legislation surrounding the upcoming ballot should pave the way for the commercialization of various formulations of cannabis to treat pain and other conditions without having to go through the rigorous FDA approval process. Think herbal medicine as s currently available, vitamins, that sort of thing. If Cannabis Science can put together some data that suggests its products have an impact in pain, or asthma, or anything else, it can (with certain restrictions, of course) commercialize these products as non pharmaceutical grade remedies, under inference of efficacy.
“This transdermal patch may reduce pain in fibromyalgia patients”, that sort of thing.
This isn’t going to bring in massive revenues, the company would need to carry through the standard development process to have any chance of targeting the blockbuster pharmaceutical markets, but it would serve as nice fodder for press release material, and in turn, could easily add near to medium term value to the company’s market capitalization. We said in the introduction that Cannabis Science knows how to control news flow to its advantage, and we’ll wager it’s got a few things up its sleeve to do just that as the interest heats up, piques and ebbs surrounding recreational legalization.
The bottom line here is that if you’re looking for a cannabis company with solid fundamentals and a guaranteed future, you’re looking in the wrong place. That said, with the current buzz surrounding the space, even the strongest company is probably overvalued right now anyway. What Cannabis Science can offer, however, is a nice way to play the news, and there’s plenty of cash to be picked up with the company as this industry moves forward.
We will be updating our subscribers as soon as we know more. For the latest updates on CBIS, sign up below!
Disclosure: We have no position in CBIS and have not been compensated for this article.