On Feb. 26, 2014, Advanced Cannabis Solutions (OTCQB: CANN) stock volume continued to soar with 931,764 shares changing hands, more than 8 times its three-month average volume of 115,995 shares.
In addition, CANN's share price closed at $32.50, up $12.45, or 62.09 %, from its closing price of $20.05 the previous day.
The Colorado Springs, Colo-based company that leases growing space and related facilities to licensed marijuana business operators has seen its share value nudging upward over the last month.
Good News Reaches Critical Mass
The upward trend, which reached critical mass Feb. 26, is being fueled by a spate of positive news coming from the company.
On Feb. 20, Advanced Cannabis Solutions said it has signed an agreement to provide comprehensive consulting services to a significant investor group in Canada. This group is involved in the start-up and operation of a large cannabis production operation serving the Canadian medical marijuana marketplace. The contract has a minimum duration of six months and a potential value in the low six figures.
In addition, the company that is headquartered in the middle of one of the first, vibrant legal-marijuana marketplaces in the country has recently been approved for a major line of credit.
These two elements are essential for Advanced Cannabis Solutions to be able to build and equip the facilities it wants to rent to cannabis growers.
In Colorado alone, the medical marijuana market is estimated to be $350 million in size while the legalization of recreational marijuana could expand that figure to over $500 million in 2014 by some accounts. These figures are significantly larger throughout the United States. Some analysts estimate the total market at between $10 billion and $120 billion per year in size, depending on the success of various legalization efforts and the components included in the estimates.
New 30-Million Credit Line
On Jan. 21, Advanced Cannabis Solutions announced that it had established a $30-million credit line.
According to a release, Advanced Cannabis Solutions signed a definitive agreement with Full Circle Capital Corp., a closed-end investment company. The agreement provides that the investment fund will initially provide $7.5 million to the company in the form of Senior Secured Convertible Notes, subject to certain conditions. An additional $22.5 million can be borrowed by Company with the mutual agreement of the company and the investment company.
At least 95% of the loan proceeds will be used to acquire properties, which the company consistent with its business plan, will lease to licensed cannabis growers.
"The six-year loan will be secured by real estate acquired with the loan proceeds, and will require interest-only payments at a rate of 12% per year," the release explained, outlining the agreement.
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Share Price Loses 37% of Value in One Day
Conversely, Fresh Healthy Vending International, Inc. (OTCQB: VEND) share value fell by 37% on Feb. 26, closing $5.00 a share, down $2.93 from the previous day’s close of $7.93
Likewise its share volume literally shot through the Ionosphere with 4,618,218 shares changing hands, more than eight times its three-month average volume of 558,295 shares.
Moves To Acquire Micro-Markets Division
The surge in volume and drop in share price is probably a negative reaction by shareholders to the San Diego-based vending machine company’s move Feb. 24 to acquire Micro-Markets Division from Corporate Refreshment Services LLC.
Here’s an excerpt from Fresh Healthy Vending’s press release on the proposed acquisition:
Fresh Healthy Vending entered into a non-binding term sheet for the acquisition of an integrated micro-market platform and all existing micro-market assets and operations from Corporate Refreshment Services, LLC (CRS). The assets purchase will include all micro-market operations and assets belonging to CRS including, but not limited to, all micro-market locations, inventories, accounts receivable, software, systems and intellectual property.
Upon closing of this proposed purchase, Fresh Healthy Vending plans to rapidly increase the number of company-owned micro-markets in the San Diego area. Additionally, the “company expects to begin offering the integrated micro-market platform to all existing and prospective franchisees.
Fresh Healthy Vending executives describe the soon to be Fresh Micro-Market as "a mini whole foods for the office break room.” A micro-market is an unstaffed, self-checkout, mini food store that integrates seamlessly into an office space.
Free to businesses that meet minimum qualifications, micro-markets are a great option for workplaces that want to
If yesterday’s reaction to this news continues, it will be bad news for Fresh Healthy Vending and its acquisition plans.
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Growlife – Stead As She Goes
On Feb. 26, Growlife Inc. (OTCBB: PHOT) continued to enjoy a robust stock volume with 38,909,110 changing hands.
The steady uptick in volume began when the Woodland Hills, Calif. holding company that supplies equipment for legal marijuana growers announced on Feb. 7, 2014 that a majority of its stockholders preliminarily approved a provision that would allow the company to increase the number of its authorized shares of common stock from 1 billion to 3 billion.
In the surprise announcement, GrowLife also said the increase in shares does not “immediately dilute” the current issued and outstanding share count. The company also pointed out that the provision was approved by 88.2% of the shares entitled to vote on the sole proposed item.
Some industry experts contend this move will give Growlife the money it needs for expansion. Others are puzzled by the action and are not sure what effect it might have long term on the company’s current shareholders.
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Developing Various Cannabis-Related Markets
Growlife has been positioning itself in the medical marijuana industry by developing various markets and deploying new products and services in them for months.
For example, one of its recently acquired companies makes hydroponic grow containers, which are designed to grow vegetables, herbs, flowers and fruits in any environment. The company appears to be vigorously considering every possible angle and service to capture its piece of the legal cannabis pie.
On Jan. 31, Growlife announced that it had entered into a strategic partnership with RXNB Inc. by purchasing a 40% equity stake in the company. Growlife plans to distribute RXNB ‘s proprietary technologies globally and share profits related to technology licensing, subject to the approval of the GrowLife its board..
RXNB is an investment company with holdings in drug formulation, manufacturing, and distribution. The company represents a recent roll-up of several independent companies in the pharmaceutical and nutraceutical market. RXNB has numerous pending patents in the field of THC research and development. RXNB has a portfolio valuation of $110 million dollars and approximately $27.5 million dollars in annual revenue.
On Feb 26 PHOT shares closed at 39 cents up 5 cents from its closing price of 34 cents the previous day.
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