Cannabics Pharmaceuticals Inc (OTCMKTS:CNBX): Here's Our Take

Cannabics Pharmaceuticals Inc (OTCMKTS:CNBX) has been a major runner over the last six months. The company picked up some initial benefit from the industry wide boost seen in the cannabis space ahead of (and on the back of) the recreational legalization ballots in the US early November. Since the ballots, however, may of the companies that picked up some collateral benefit (and even those that don’t really have ties to the recreational space, like this one, did) many have retraced their gains. Cannabics is not one of these 'retracers'. Instead, the company has held on to its run, and currently trades for a close to 3000% premium on its September 2016 close.

This week, it's started to accelerate once more.

The company closed out last week for less than $1 a share. It now trades for $1.32, registering gains of close to 40% in a matter of days.What’s driving the run? Cannabics announced at the start of the week that it had started to commercialize a diagnostics test, designed to improve the personalized therapy landscape in cannabis based oncology treatment. Cannabis and its application to healthcare is a big topic right now, and one of the major drivers in the space is the way we can use cannabis (or more specifically, cannabis derived elements) to treat cancer. Cannabics' operational model covers a range of different applications under this umbrella, but the one that we see the most value in is the one that is in focus in this discussion – diagnostics.Basically, the company hypothesized that it's possible to use cannabis derived cannabinoids to create a personalized cancer diagnostic that can detect and – in turn – represent the severity of cancer in patients. The exact process through which it does so is a bit unclear (it's proprietary, so the company hasn’t been particularly forthcoming with the technology that underpins it) but we know that it employs what's called circulating tumor cell (CTC) technology to undertake its diagnosis. In short, a physician takes a blood sample and then runs tests on the sample to detect cancer cells. The more cells, the more advanced.CTC diagnostics is a pretty wide spread method used to detect cancer severity right now, but the application of cannibinooids to the sector is brand new. The theory is that by using them in this type of diagnosis can not only provide a greater accuracy of severity and type, but can also serve to indicate which treatment might be the most effective in countering the tumor that shed the cells in the first place.It's still early days, and there's not a great deal of data supportive of the hypothesis. With that said, and as the commercialization run that is driving the gains right now illustrates, there is demand for this advance. Further, as the demand (and by proxy, use case volume) increases, the data bank that supports this technology will also increase. That's what the company is banking on from a longer term development perspective.So, what’s next?Well, Cannabics expects to kick of the commercialization rollout at some point before the end of this quarter, and we expect March is the most likely timeframe to watch. It will involve 10 patients, and these will mark the first from a commercial perspective to become subject to CTC cannabinoid tech.We are looking for data from the first ten patients to hit press (if it works as hoped, we've no doubt that the company will put out numerous press releases stating such), and this data – in turn – to help boost Cannabics' market capitalization moving forward as 2017 matures.Standard capital risks apply to an exposure here – the company isn’t generating revenues and cash as of November 30 came in at just $280K. As such, we're expecting a near term raise to dilute early stage holders. If the gains continue, however, this dilution should be bearable on a long term exposure.We will be updating our subscribers as soon as we know more. For the latest updates on CNBX, sign up below!Disclosure: We have no position in CNBX and have not been compensated for this article.