Cannabis Science Inc (OTCMKTS:CBIS) Consolidating Before Heading Higher

In our last article about Cannabis Science Inc. (OTCMKTS:CBIS), we noted that the shares of this cannabis manufacturing and drug development company were trading at a large discount to its highs that were hit a few months ago. It does not seem to matter the large amount of good news about the company's R&D program delivered every week, or the stock popularity on iHub, Facebook and Yahoo Finance. Instead, it continues its consolidation movement at the $0.06 level.Since our last update was put out, interesting news was released and the market reacted positively. CBIS noted that it has obtained U.S. Federal Government clearance to receive U.S. Federal Government contracts. Both the share price and the volume increased. Have a look at the long term performance of the stock, before we explain what happened in the last two weeks.SourceRecent DevelopmentsSourceAs we said on May 26, 2017, CBIS received U.S. Federal Government clearance to sign U.S. Federal Government contracts. What does it mean? What are the opportunities that are now open? The fact that the US Government may be working with CBIS does not only bring recognition to the company, but, it also increases the chances of new revenues, because the U.S. Federal Government is the largest customer in the world, issuing over $192 billion in contracts and over $450 billion in grants annually. Mr. Raymond C. Dabney, Cannabis Science's President, CEO, and Co-founder, explained in the following words:

"Achieving eligibility to access contracting opportunities with the U.S. Federal Government is a significant step for Cannabis Science. I believe we can leverage the unique experience and expertise of our company to win new business and grow Cannabis Science's revenue base. We also plan to work closely with our strategic partners and collaborators to access Federal contracting and grant opportunities." Source

The market reacted to this news on May 26 by running the stock up 20%.SourceThe press release also included information about the company's connections with US Government health institutions: the National Institutes of Health (NIH) and the National Institute on Drug Abuse (NIDA), among others. Additionally, the work of these bodies were noted. It seems that CBIS could be a great asset for the NIDA's R&D activities:

"NIDA funds a wide range of research on marijuana (cannabis); its main psychotropic ingredient, delta-9-tetrahydrocannabinol (THC); and chemicals related to THC (cannabinoids). Research suggests that THC and other cannabinoids may have potential in the treatment of pain, nausea, epilepsy, obesity, wasting disease, addiction, autoimmune disorders, and other conditions. NIDA has provided and continues to provide funding for research related to therapeutic uses of cannabinoids as it pertains to its mission, including studies on the use of THC and cannabidiol (CBD), another chemical constituent of marijuana, for the treatment of pain (as an alternative to opioid pain relievers), addiction, and other disorders. "

Social mediaThe company's popularity on social media is large. The iHub forum is full of comments from market participants, who assess the latest company's news. Additionally, on the Yahoo Finance forum, we could find 2,951 reactions to the company's news, which is very large. Furthermore, Twitter and Facebook also extensively noted the company's growth. In our opinion, the fact that the company is analyzed by many market participants is very positive.Financial conditionWe performed an analysis of the last reported balance sheet, which we found here, and could highlight the following financial figures:

• Cash: $332,000
• Long term investments: $272,000
• Total assets: $1,196,000
• Ac. Payables: $1,289,000
• Long term debt: zero
• Retained Earnings: (137,929)
• Total liabilities: $3,042,000

The market should appreciate the cash on the balance sheet and no long term debt. Furthermore, the retained earnings are very large. These earnings are tax deductible and will decrease the amount of taxes that the company will have to pay in the future. You can check this great accounting method in Investopedia.ConclusionsIn this new article, we saw that CBIS is now working with the US Government. The market noted the news and pushed up the share price. Furthermore, we saw that the amount of market participants checking this business model and evaluating the press releases on social media is large, which is also a sign of the company's positive outlook. Finally, the balance sheet does not contain long term debt, and there is a large amount of tax deductible retained earnings. Hence, as we said at other occasions, stay alert; the company has surprised the market this time, and delivered short term gains for some nimble traders. 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.