How Far Can Cannabis Science Inc (OTCMKTS:CBIS) Run?

The hype surrounding the cannabis legalization environment in the US has all but died down from a public market perspective, yet a number of companies continue to gain strength. For some, this strength is driven by news releases and fundamental catalysts. For others, however, there doesn't seem to be any real justification behind the action we are seeing. One example of this right now is Cannabis Science Inc (OTCMKTS:CBIS).The company is up more than 130% across the last 30 days alone, and doesn't look as though it's going to slow down anytime soon, with volume continuously breaching highs. The question is, however, how long can it maintain its momentum? Surely, at some point, we must see a correction if no news hits press soon. Further, another question is whether this correction will give back the gains seen over the last 30 days, or whether Cannabis Science can hold on to some of its new found strength and build from a fresh level of support.We're going to try and answer these two questions.For those not familiar with the company, it is a pharmaceutical focus cannabis entity, seeking to develop treatments rooted in what are called phytocannabinoids, which is just a fancy word for any cannabinoids found naturally in cannabis plants. Its current lead targets are autism, blood pressure, cancer and chemotherapy induced nausea and vomiting. That's a pretty wide range of target indications, and one that seems ambitious, but the nature of these cannabinoid rooted therapies is such that a wide treatment net is far from impossible with a single therapy (or various iterations of it).With that said, this company is at the very early stages of development, and while it is targeting some pretty blockbuster indications, it has a long way to go before it even gets any of its assets into the clinic.So what have we learned recently about the companies that might justify some upside momentum?On January 6, Cannabis Science announced a collaborative research agreement with Dana Farber/Harvard Cancer Center (DF/HCC). There's not much detail on the collaboration as things stand – all we know is that the two entities are going to be working together to try and push some pre clinical oncology assets into the clinic – but DF/HCC is a well respected and established player in the oncology space, so the partnership does warrant a bit of strength.Not the entirety of the recent gains, however, so what else has hit press?Last month, Cannabis Science announced it had started work on its second 33,000 sq. ft. pilot cannabinoid drug development and manufacturing facility in Douglas County, Nevada. The plan with this facility is that it will house some of the company's grow operations (the plants with which the company will conduct its research) and research and development activity.Here's what the CEO had to say of the expansion:

"We need all the drug development capacity we can get, because we intend to ramp up our operations to meet the increased demand for cannabinoid medications across the country. This market is coming into full-bloom, and 2017 is the year we will be positioned to capitalize on this tremendous opportunity."

Big words, and again, a step forward, but in our opinion, not enough to warrant the upside we've seen. So what else?Back in November, Cannabis Science reported that it plans to initiate a long awaited medication study for Pulmonary Patients suffering from varying failing lung functions stemming from Cancers to Bronchitis and all in between respiratory ailments. The timeframe for this initiation (at the time of the release) was reported to be before the end of the month. As yet, we're still to hear anything as to whether this program is actually underway.As things stand, then, Cannabis Science has a fledgling partnership in place with DF/HCC for an oncology therapy, a nascent study program in pulmonary patients that still looks like it's got to start properly, and an ongoing build-out program for an expanded facility.Let's go back to the questions, then.Can the company maintain its upside run? In our opinion, yes, so long as it can maintain a positive news stream. That's all markets seem to be interested in right now, and that's what we're looking to as a near term value driver.How deep will the correction be if and when it comes? We don't think it will correct all the way back down, and we think the company should find some solid support in and around the $0.05 mark. This, in turn, would provide an opportunity to pick up an exposure on a pullback.It's a risky one, of course. With no clear drivers other than early developments in place, there's always the potential for things to fall right back to where they started. As a news play, however, and with industry momentum behind it, this could be a nice runner near term.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.