CV Sciences Inc(OTCMKTS:CVSI) has been making a huge comeback since dipping below $3 per share after the Citron research fiasco. The Company continues to see fantastic sales growth and prior to the dip was one of the top performing stocks of 2018. Now that Andrew Left has covered his short the bulls have taken charge again.
CVSI is at the right place at the right time; according to a report published by New Frontier Data, the U.S. CBD industry grew by nearly 40% in 2017, reaching USD $367 Million in sales across hemp-derived and marijuana-derived markets. The U.S. CBD market is primed for expansive growth across its three primary sectors, hemp-derived CBD, marijuana-derived CBD and pharmaceutical CBD.
CV Sciences Inc(OTCMKTS:CVSI) operates two distinct business segments: a drug development division focused on developing and commercializing novel therapeutics utilizing synthetic CBD; and, a consumer product division focused on manufacturing, marketing and selling plant-based CBD products (PlusCBD Oil(TM)) to a range of market sectors. The largest segment is the consumer products business segment, which is in charge of manufacturing and selling the company’s CBD brand PlusCBD™ CV Sciences, Inc. has primary offices and facilities in San Diego, California and Las Vegas, Nevada.
The big story on CVSI is PlusCBD Oil™, the #1 brand of hemp-derived CBD products in the natural channel according to SPINS scan data, has achieved immense success since the launch of its brand of dietary supplements in 2014. This brand is currently being sold in approximately 1300 health food stores and continues to grow its shelf presence in various retail outlets across the country.
PlusCBD Oil™ is seeing huge success and has resulted in massive sales for CVSI: on August 1, CVSI announced Second Quarter 2018 Financial Results. The Company announced record sales of $12,349,000 an increase of 203% compared to Q2 2017. CVSI also increased retail store count to 1,968 natural and organic health food stores as of June 30, 2018, representing an 11.1% sequential increase over the Company’s retail store count for the first quarter of 2018. PlusCBD™ product line is now positioned for mainstream acceptance and expanded distribution as the health and wellness markets continue to embrace CBD commercialization and standardization.
CVSI is also looking to up-list; earlier this year the Company submitted its application to list the Company’s common stock in the U.S. on the Nasdaq Capital Market. Acceptance for listing the Company’s shares is subject to approval based on several factors including satisfaction of minimum listing requirements for the Nasdaq Capital Market. The Company intends to satisfy all of the applicable listing requirements, however, there is no assurance that its application will be approved. During the Nasdaq review process, the Company’s common stock will continue to trade in the U.S. on the OTC under its current symbol, CVSI.
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The last month has been a wild one for CVSI; On August 20, 2018 noted short-seller, Andrew Left) released a tweet alleging that CV Sciences’ management misrepresented the status of one of its key patents. According to Citron Research, the Company failed to disclose a rejected patent that the Company “continue[d]to hype.” Since then a number of class action lawsuits have been filed by law firms accusing the Company of failing to disclose that the U.S. Patent and Trademark Office rejected the patent for CVSI-007, the Company’s lead drug candidate for the treatment of smokeless tobacco addiction. There has been some discussion on whether Citron neglected to clarify that the patent is currently under appeal, and not absolutely rejected as his tweet would have you believe. As a result of the Citron report, CV Sciences stock plunged over 63% in volatile trading.
$CVSI misrepresentation by management. The total bull case is based on REJECTED patents the company has never disclosed and continues to hype. Securities Fraud? Another IRTH special pic.twitter.com/nhI7Da8PoO
— Citron Research (@CitronResearch) August 20, 2018
The short attack fueled by a number of class action lawsuits as well as a negative seeking alpha article caused CVSI to drop from highs of $9.20 per share to $3.40 the 1st day with a subsequent drop below the $3 mark. Since then however CVSI has been coming back strong in recent days helped along by the fact that Citron has covered their short position.
Citron covering $CVSI short. Making 70% in a week is always a good trade. Stay tuned for more cannabis trades, our team is working hard to bring you the next 70% return.
— Citron Research (@CitronResearch) August 29, 2018
On September 10 CVSI announced the Company’s hemp-derived CBD gold extract which includes all of PlusCBD Oil™ Gold Formula product line, has received self-affirmed Generally Recognized as Safe (GRAS) status in accordance with stringent U.S. Food and Drug Administration (FDA) safety guidelines. CV Sciences is the only hemp CBD nutraceutical company to invest in the scientific evidence necessary to achieve this sought-after designation, recognizing an ingredient as presumably safe among experts under the conditions of its intended use.
As demand for CBD continues to increase, research has cited tremendous growth including Hemp Business Journal, an industry market research publication which projects that the CBD market will reach $2.1 billion by 2020. CV Sciences’ vertically integrated process allows for Full Traceability – From Seed to Shelf™ and ensures product quality and safety for its complete line of finished products.
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Currently trading at a $435 million market valuation CVSI is one of the hottest stocks on the OTCBB and one of the most volatile. Recently dipping below $3 per share at the height of the Citron research fiasco, CVSI has been making a significant comeback and is currently running up the charts. There is a ton to get excited about here; CVSI has huge sales which have been growing rapidly reporting record sales of $12,349,000 for the Second Quarter 2018 an increase of 203% compared to Q2 2017. The Company has no debt, is making money and is looking to up-list to the NASDAQ and now that Andrew Left has covered his short the bulls have taken charge again. We will be updating on CVSI when more details emerge so make sure you are subscribed to Microcapdaily so you know what’s going on with CVSI.
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Disclosure: we hold no position in CVSI either long or short and we have not been compensated for this article.