mCig Inc (OTCMKTS:MCIG): Growth In All The Right Places

In the wake of the recreational cannabis legalization ballots in the US end last year, marijuana stocks ran up pretty much across the board. Here at Insider Financial we covered quite a lot of the runners, in an attempt to separate out those that we're promising plays in the space fro those that were simply picking up strength by association.mCig Inc (OTCMKTS:MCIG) is one that we've looked at on a few occasions over the last six months, and one that we have categorized as falling within the former category – those cannabis stocks that have the potential to hold on to the strength gained by its cannabis industry links, and further, use this strength as a platform form which to run.Back in November, the company traded for around $0.15 a share. By early February, this had risen to $0.5. Driven by what we see as a combination of traders taking profits off the table, and a slight sentiment hit on the back of cannabis related comments from the Trump administration, mCig has since corrected, and dropped back down to around $0.25 at the beginning of this month. This week, however, the correction floored, and the company has run back up to $0.34.The big question now, is what's next?In short, we think things look promising.For those new to the company, this one started out as a vaporizer producer, but has since expanded to establish itself as a sort of full suite cannabis play. It's a hemp based CBD supplier, manages and retains its vaporizer brands, is trying to build out a prepackaged cannabis cigarette product and – as we'll note again shortly – is working its way into the cannabis construction and consultancy industry to great effect.The bottoming out of the February correction, and the subsequent run this week, comes on the back of the company putting out its third quarter financials. The numbers address the three months to January 31, 2017. There are a couple of highlights that we feel reinforce out longer term bullish bias.As compared to the same period in 2016, the company grew revenue to the tune of 450%, from $250K to $1.4 million. Gross profit on these revenues also increased, rising from $85K during the 2016 quarter to $290K for the just reported period. While these two numbers increased, expenses decreased to the tune of 27%, and cash (which is a real key metric for this one) grew 422%, from $94K to $1.25 million.Underpinning these numbers were a few key operational milestones. The company entered into a joint venture (something we looked at in previous coverage) that should see an expansion of its VitaCBD brand – one of mCig's primary revenue driving brands. The company also completed its first construction project, a project for which, as per the latest communication, is awaiting Certificate of Occupancy. This project will cement mCig's cannabis cultivation activity, and for us is an important aspect of the company's operations. It's not going to make a huge different to top line in itself, but it's the first step in the establishing of a new business arm that will impact revenue potential considerably.So we've got a company here that is growing rapidly against a backdrop of industry expansion. Topline is increasing, costs are narrowing and cash is building. There's risk, of course, and we're probably going to see some degree of dilution before long. There's also the political and macro headwinds, which while we don't lend too much credence too longer term, may impact the company's ability to appreciate very near term.Risks noted, however, we think there's strength to be taken advantage of going forward. Management will hold a conference call after market close to lay out its operational plan for the year, and we'll be listening to gain further insight into time frames.We will be updating our subscribers as soon as we know more. For the latest updates on MCIG, sign up below!Disclosure: We have no position in MCIG and have not been compensated for this article.