mCig Inc. (OTCMKTS:MCIG) Sell-Off Persists Even As Record Sales Looms

mCig Inc (OTCMKTS:MCIG) harrowing plunge raises serious concerns about the stock’s long-term prospects. A plunge to one-year lows is a stark contrast to the bullish momentum in the broader cannabis sector.

Share Price Analysis

After initially bottoming out, in what appeared to be a breakout play after succumbing to short selling pressure in 2018, mCig has once again come down tumbling. The stock has shed more than 30% in market value from this year’s higher highs in what appears to be a continuation of the long-term downtrend.The plunge comes even on the company delivering record revenues in its cannabis supply division early in the year. In addition, the company signed a binding memorandum of understanding that paves the way for it to expand its footprint into California’s burgeoning cannabis market.However, as it stands investors have continued to shun the milestones and continued to push the stock lower low. mCig is currently flirting with two-year lows and faces the risk of continuing to edge lower on soaring short selling pressure.Considering the long-term downtrend, the stock could plunge to the $0.05 level, seen as the immediate support level. A breach of the $0.10 level would give short sellers a reason to continue pushing the stock lower, probably to the $0.05 level. MCIG Daily ChartFor the stock to turn bullish in the short term, it will have to bounce back and take out the $0.15 mark, a critical resistance level. Above the $0.15 level, the stock would stand a chance of making a run for the $0.20 level, which happens to be this year higher highs.

What does mCig Do?

MCig is a diversified holding company with operations in the legal cannabis, hemp and CBD markets. The company operates under four segments of cultivation, manufacturing, distribution and retail sales. It's core business revolves around the cultivation production and distribution of cannabis products.

Sales Growth Outlook

MCig share price implosion does not paint a clear picture of underlying developments that affirm the company’s progress in the cannabis sector. The company continues to experience unparalleled growth as a manufacturer, distributor, and retailer of cannabis products.According to the Chief Executive Officer, the company is on course to achieve record sales of $2.5 million for the fiscal year ending April 30. MCig is fresh from generating record sales of $650,000 in Nevada and California, setting the stage for a record year of sales.The company has also received its first large order in Canada as it continues to reap the rewards of its robust expansion drive in North America in pursuit of sales opportunities.

“The management team of Cannabis Supply has been doing a great job to expend the business and achieve sales targets. We are winning business from other cannabis supply companies by offering our clients a wide selection of quality products, competitive pricing, and great customer service. We all see 2019 as a great year for our Cannabis Supply Division,” says Paul Rosenberg, CEO of MCIG.

MCig remains on course to enjoy accelerated sales growth in 2019 on signing a memorandum of understanding with a California investment firm. The two are to collaborate on the growing, processing and distribution of medical cannabis in the state.The two have also agreed to form a joint venture with the purpose of pursuing additional licenses in multiple states all in the effort of establishing a nationwide presence. Under the terms of the agreement, the investment firm is to furnish the joint venture with operating capital.Plans are already underway for the construction of a state of the art 30,000 square foot cultivation facility in a property located near the Sequoia National Forests.

“We are excited to sign a Memorandum of Understanding with our Partner, which will help the company to finance its cannabis related expansion fully. We are picking up the pace on our California City project, and our investing partners will ensure we continue at a rapid pace,’ mCig in a statement.

What Next For mCig?

mCig may as well be a breakout play even on underperforming the overall cannabis sector. The stock has continued to edge lower even on management projecting a record-breaking year on sales growth. While the short selling pressure persists, improving fundamentals could help reinvigorate investors’ confidence in the stock.That said, would-be investors should pay close attention to price action activity as a bounce back past the $0.15 mark could trigger a turn-around in the direction of trade.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.