So far we have been spot on with our analysis of the Canadian marijuana stocks. Since publishing an article on October 3rd highlighting 6 Canadian marijuana companies, those 6 companies combined for 480% gains in less than a month. Now it’s time to evaluate some of the US listed marijuana stocks.
During this marijuana industry rally, one of the most important things to look for, perhaps even more important than management and business plan progression for the short-term, is the presence of convertible debt on a company’s books. Many of the US listed marijuana stocks are up to their neck in nasty convertible notes that once converted into common stock, will put a tremendous amount of pressure on share prices.
For example, our very own Jason Spatafora, aka the Wolf of Weed Street (you can follow Jason on Twitter @wolfofweedst), was screaming for investors to take profit in Medical Marijuana, Inc. (MJNA) when it broke above $0.20 a share. Why? Because he did his research and knew there was a significant amount of debt about to convert that would put pressure on the stock. And seemingly like clockwork, MJNA crashed to $0.10 just two days later.
With that said, here is one US marijuana company whose chart is setting up beautifully with ZERO debt on its books. This means there is no dilution or large shareholder who will be dumping large blocks of stock into the market. Less dilution means less resistance for a stock to move higher, and this company has NONE of it.
mCig, Inc. (MCIG)
MCIG recently broke above a significant resistance level around $0.135 on very high volume. Strong volume is crucial when identifying a sustainable breakout. After the break above $0.135, MCIG came back to test that area on November 4th. And as you can see in the chart, the stock held beautifully. The $0.135 area which was once resistance is now support for MCIG. This hints towards a continued uptrend and displays overall strength in the stock.
A bullish setup would be if we see MCIG now consolidate above this new support area while maintaining steady volume. And without any dilution and debt conversions to stand in its way, a break through the $0.19-$0.20 area could ignite a second momentum based move taking MCIG higher.
Keep in mind that MCIG Inc, specifically their Scalable Solutions division is based right now in the fastest growing cannabis market in the United States. Tomorrow Nevada will be voting on recreational use for cannabis and from what we understand the vote is close, but leaning towards passage. Regardless of the outcome Scalable Solutions will still be building and expanding cultivation facilities in the state like the 100,000 square foot Solaris greenhouse. On medical marijuana cultivation facilities alone they will have years of projects, with recreational passing it’s safe to assume they will have to scale up the operation to meet what will surely be massive demand. Let’s not forget they also have a huge CBD sales revenue stream and their Rollie’s brand well positioned in the state.
MAPH Enterprises, LLC | (305) 414-0128 | 1501 Venera Ave, Coral Gables, FL 33146 | new@marijuanastocks.com
