Is Advanced Cannabis Solutions (CANN) A Buy Now?

CANN Stock, CANN Stock Suspended, Advanced Cannabis Solutions Inc.The SEC created an amazing opportunity on what is due to become penny stock as of April 10, 2014. Shares of Advanced Cannabis Solutions, Inc. (CANN) were suspended this morning locking a herd of investors in for a 10 trading session wait only to find out that share prices will be reduced by over -90% when trading activity resumes. The Seeking Alpha shorts have most definitely won the battle by helping to burn down the crops, but the term grows like a weed is what new buyers of CANN stock will be saying after getting in cheaper than anyone come Thursday, April 10.

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Market Cap: 400.28M
Last: $29.99
December 2: $1.5001
March 5: $64.64
Ytd Average Volume: 239,410
Authorized: 100,000,000
Issued and Outstanding: 15,097,200

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Robert Frichtel, CEO of Advanced Cannabis Solutions, sure has got himself into a pickle with his shareholders after the SEC determined that a suspension of CANN stock was necessary due to “a lack of current and accurate information concerning the securities of Advanced Cannabis Solutions, Inc. The suspension goes on to state that “There are questions regarding whether certain undisclosed affiliates and shareholders of Advanced Cannabis common stock engaged in an unlawful distribution of securities through the OTC BB and OTC Link.”

That’s a very nice way to put “CANN stock had no business running up to as high as $64.64.” Since “the Commission is of the opinion that the public interest and the protection of investors require a suspension of trading in the securities of the above-listed company” CANN stock is suspended from today, March 27, 2014, through 11:59 p.m. EDT, on April 9, 2014. Translation: prepare to load the boat with CANN stock on April 10.

Let’s assume that the less than $500 of revenue reporting start up company is right when they state “It is believed by many that large well-funded businesses may have a strong economic opposition to the marijuana industry.” Let’s also assume that the $455 in sales from drilling activities during the 3 months ended September 30, 2013 was only because their leasing of commercial real estate to cannabis operators was due to commence after Colorado made recreational marijuana legal.

Let’s also assume that, as the current national regulated cannabis market, estimated to be $1.5 billion annually, grows to $30 billion by 2018 as additional states approve cannabis use for its citizens according to some experts, the 3 acres of land, which includes a 5,000 sqft steel building and a parking lot, that Advanced Cannabis Solutions bought on the last day of 2013 for $280,000 and a promissory note in the principal amount of $170,000 turns a profit.

At $15 per sqft (as per the MediSwipe (MWIP) suggestion in the WSJ), the Company reported that it’s already zoned for growing marijuana and is leased to a medical marijuana grower until December 31, 2022. Advanced Cannabis Solutions also reported already that they agreed with the tenant to begin construction of an 8,000 sqft. light deprivation greenhouse on the property at a cost not to exceed $400,000 with construction to commence no later than June 25, 2014.

With a chance that they might build up to 5 additional green houses on this property, the $100,000 increase in annual rents to the existing tenant coupled with the chance that another maybe $200,000 annually might come from the other 5 greenhouses, CANN stock will have no business having a $400 million market cap like it did as of yesterday’s close.

Heading into today’s trading session, CANN stock was up 822% after stating out the year at $2.37. Although the share price had dropped -53.60% since the first week of March, that drop is nothing compared to what the share price of CANN stock will reopen at come April 10.

Looking back at a similar situation, shares of Makism 3D Corp., Inc. (MDDD) dumped hard as soon as their hard mail campaign originally began back in the beginning of December, 2013. Within a week, shares had risen from 0.415 to $1.60. On December 12, a Seeking Alpha article was published calling for MDDD shares to drop by over -75% soon.

Low and behold, MDDD stock was suspended the following day and put on the naughty shelf for 10 trading sessions, missing out on all the Christmas cheer only to come back even stronger the day before champagne glasses chinged around the world. From December 30 to January 15, MDDD stock ran from a low of 0.12 to as high as $3.20 on much lower volume than when it was in it’s prime pumping stage.

Regardless, the possible 2,566% gains attainable on a 3D printer start up are nothing compared to what gains April 10 buyers of CANN stock could see. With CANN stock sure to open at much less than $1, a return to just $5 would be worth the ride let alone a return to above $20.

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About CANN Stock

Advanced Cannabis Solutions, Inc. is a development stage company planning to lease growing space and related facilities to licensed marijuana growers and dispensary owners for their operations as well as provide a variety of services to the cannabis industry, such as compliance support and consulting.

Click here to view the SEC filings for CANN.
Click here to view the website for Advanced Cannabis Solutions.

Last 5 Trading Sessions:

Date Open High Low Last Change % Change Volume
03/26/14 29.0100 31.0200 28.9300 29.9900 +1.3000 +4.53% 87,800
03/25/14 24.8000 28.8000 24.8000 28.6900 +4.1900 +17.10% 147,400
03/24/14 28.8850 28.8900 22.1100 24.5000 -4.5500 -15.66% 347,900
03/21/14 35.0500 36.0400 28.5000 29.0500 -6.0000 -17.12% 144,700
03/20/14 37.4000 38.0000 35.0000 35.0500 -1.9800 -5.35% 48,400


Bottom Line:

Call it what you want, but CANN being suspended at $30 guarantees it will resume trading as a penny stock on April 10. While you might need to call your broker to buy shares if, and only if, your broker will execute a trade for a ticker on the “GREY” market, it’s highly probable that those new buyers in CANN stock on April 10 will be laughing all the way to the bank throughout April and well into May.

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