mCig Inc (OTCMKTS:MCIG) shares jumped 35.45% on Wednesday to $0.167 and down 15.37% in after-hours trading. The company has a market cap of $55.80 million at 331.66 million shares. Share prices have been trading a 52-week range of $0.02 to $0.17.
mCig Inc is a diversified company servicing the legal cannabis, hemp and CBD markets through its lifestyle brands. has transitioned from a vaporizer manufacturer to industry large scale, full service cannabis cultivation construction company with its Scalable Solutions division operating in a Nevada market. Its construction division constructs commercial buildings and modular buildings according to plans supplied by the customer, or act as a design/build firm taking the customer from concept to full turnkey occupancy, utilizing modular technology and structural insulated panels.
Aside from that, the company manufactures, distributes and retails the mCig, a loose-leaf electronic vaporizing cigarette. Its subsidiary, Vapolution, Inc., manufactures and retails home-use vaporizers, such as the Vapolution 2.0. This means that mCig Inc is well-positioned to take full advantage of a boom in the cannabis industry, as California Proposition 64, the California Marijuana Legalization Initiative, will be voted upon during this month’s elections. This same initiative will be up for a vote in Nevada.
Early polls are suggesting that the Yes camp will be able to score a victory, which explains why cannabis-related firms have been seeing their shares surge in the past few weeks. If this is indeed the case, a stronger bullish run could be seen for mCig Inc shares, stemming from its five divisions: Scalable Solutions, VitaCig, VitaCBD, Rollies and mCig Internet.
Scalable Solutions currently has five projects under construction and an additional $6 million in backlog orders. Its main focus is in Nevada so a new wave in demand for recreational marijuana use is expected after the state vote. Analysts estimate that the sector could bring a total of $630 million in revenues annually by 2020. Insider Financial predicts that mCig Inc will chalk up anywhere between $5-10 million revenues from construction throughout 2017 and a further $2-3 million revenues from the branded sales.
From a financial standpoint, mCig Inc has maintained a strong capital standing and avoided a lot of debt exposure. By the end of July, it was able to report more than $200K in cash on hand. Its daily stock time frame reflects the strong surge since last month and the pickup in volume.
This rise in volatility could spur a quick correction soon, possibly just ahead of the actual elections on profit-taking, but this would simply offer a chance to catch short-term dips. Keep in mind that there’s also plenty of competition in the industry and other retail products could be benefitting from more marketing activity, although mCig Inc is poised for longer-term growth on its construction operation efforts.
Zooming in to the short-term time frames shows a rising channel pattern, with price already testing the channel resistance. A quick pullback to $0.12 could draw more buyers in the game and push for another leg higher, possibly until the yearly highs at $0.17 or higher.
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.