By Chris Sandburg / in Momentum & Growth, Momentum Stocks, Sector Watch, Stocks / on Friday, 16 Dec 2016 01:00 AM / 0 Comment / 286 views
Green Cures & Botanical Distribution Inc (OTCMKTS:GRCU) gained 202% since November 22 and December 6 on practically no fundamental developments. Since the December 6 highs, the company has corrected 30%, and there may be an opportunity to get in at a discount ahead a return to the upside momentum. Without any real developments, it’s difficult to gauge whether the correction is a market realignment, or just a temporary blip. In an attempt to fall on one side or the other, let’s take a look at what little the company has reported, and what it means going forward.
So, the catalysts (if we can call them that) primarily revolve around the relationship between Green Cures and an entity called Purple Haze Properties LLC. Purple Haze Properties was founded by way of a partnership between its founder and now CEO Andrew Pitsicalis, and Leon Hendrix. The latter is a blood brother to his better known brother, Jimi. The relationship is a bit tough to define, with the information available pretty convoluted, but it looks like this is what’s going on: Green Cures is designing and developing products (drinks, hemp infused edibles, that sort of thing) and handing them over to Purple Haze for branding. Purple Haze then attaches them to some celebrity, or band, or something along those lines, and the two comes split the take on sales generated from product, or product line, in question.
The most recent example of this, and the latest press release (and in turn, the only real driver behind the momentum seen in its stock price) is line of CBD and THC sodas, available in four flavors, and branded by association with the Digital Underground. The latter is a hip hop group formed in the late 1980s, that counted Tupac Shakur among its member roster.
The drink launched at the Fifth Annual MMJ Convention in Las Vegas, which was attended by 10,000 individuals, and accompanied a host of other Green Cures, Purple Haze products – bath and body products, a drink aligned with Jimi Hendrix, and a few other things.
Now, this isn’t really that important a release – it’s a pre launch event with some (albeit high) interest from potential customers. So why are we discussing it? Well, we’re highlighting it because we’ve seen what it’s done to this company’s market capitalization. If this sort of announcement can add treble digit gains before the launch of a product, we think that there’s potential for another substantial run as the story develops, and the product matures towards distribution. Further, we don’t think that it’s going to take long.
Alongside the latest press release, Green Cures reported the following:
So, we should see a few more releases before the year draws to a close, and these should give the company a boost as they hit. If they come in succession, we should see some sustained momentum.
Looking at the bigger picture, this is a company that generates revenues (which is more than can be said for many of the entities enjoying cannabis related gains) and that takes the sting out of the risk side of the equation on a speculative exposure. It doesn’t remove the risk entirely, of course – at the end of the day we’re talking about a microcap with a lot of shares outstanding (even with the latest retired 300 million) in the very early stages of its development – but at its current price, we think Green Cures is well worth a punt.