General Cannabis Corp (OTCMKTS:CANN) shares surged 40.84% at the start of the week and were flat in after-hours trading. Share prices have been trading in a 52-week range of $0.32 to $5.19. The company has a market cap of $67.64 million at 15.50 million shares outstanding.
General Cannabis Corp is a company that offers various products and services to companies in the cannabis industry. Its integrated solution ranges from operational and compliance consulting to security and marketing to financing needs, operating in segments such as Security and Cash Management Services, Marketing and Products, Consulting and Advisory, and Finance and Real Estate.
The Security and Cash Management Services segment includes the operations of Iron Protection Group, LLC. The Marketing and Products segment includes the operations of Chiefton Supply Co., which is an apparel and design company. The Consulting and Advisory segment offers consulting services, such as obtaining licenses, compliance, cultivation and logistical support, to the cannabis industry through Next Big Crop. The Finance and Real Estate segment includes real estate leasing; Shared Office Space, Networking and Event Services, and Industry Finance and Equipment Leasing Services.
According to Michael Feinsod, Executive Chairman of General Cannabis Corp, the third quarter was a historic one on many metrics. He noted that their portfolio companies continue to enjoy sustained revenue as the cannabis industry gains traction in the United States, with nine states set to vote on the legalization of marijuana for recreational or medical use in this week’s polls. He added that the company has the strongest platform in the industry and that they are set for continued growth.
We had a great third quarter, with 105% revenue growth year-to-date compared to last year, and 37% on a quarterly basis. All of our divisions continue to perform well and we’re excited about the progress of newer business initiatives and acquisition opportunities,” said General Cannabis Corp CEO Robert Frichtel. “As a publicly traded leading consolidator in the cannabis industry, we continue to see significant opportunities as additional states legalize medical and adult use marijuana. We have proven our ability to acquire and grow real companies that touch this rapidly expanding industry.”
Still, the company incurred a large increase in Other Expenses for the period ending September 30, 2016 but they explained that this was due to non-cash expenses associated with the warrants issued with our new debt and retiring old debt. Management expects at least $950,000 in revenue from existing operations in the quarter ending December 31, 2016, which would bring total revenues for the year at $3.1 million, a significant increase from last year’s revenues of $1.76 million.
In September, General Cannabis Corp completed a $3.0 million debt refinancing, receiving $2,450,000 of cash for issuing the 12% Notes and converting $550,000 of their long-term debt into 12% Notes, the proceeds of which were used to retire all of their other long-term debt. This new capital would provide the company the working cash it needs to pursue new investment opportunities.
Moving forward, General Cannabis Corp plans on making more acquisitions in 2017 and is currently evaluating pportunities in all areas of regulated cannabis. The company remains well capitalized to help businesses expand rapidly, especially with the trends showing a boom in state-regulated marijuana.
Also, the company is expanding their Iron Protection Group into Arizona and is expected to have their office up and running by January next year. It also plans on opening Iron Protection Group offices in Washington, Oregon, and California next year.
DISCLAIMER: There is a substantial risk of loss with any speculative asset, especially small cap stocks. The opinions expressed are those of the author, and do not constitute recommendations to buy or sell a stock. Do your own research before committing capital.
