In early 2015, we highlighted three publicly traded Israeli cannabis companies to watch and we hope you listened!
Although Canadian cannabis stocks have been the story to watch over the last year, Israeli cannabis stocks have been stealing headlines in 2017.
This comes after two United States traded Israeli cannabis companies, Cannabics Pharmaceuticals (CNBX) and OWC Pharmaceutical Research (OWCP) rallied 842% and 1087%, respectively so far this year.
Despite our bullish view on CNBX and OWCP prior to this rally, we have not seen anything to justify a rally of this magnitude and are cautious at current levels.
What Drives a 19,000% Rally in Less Than Six Months?
Since October 3rd, Cannabics Pharmaceuticals (CNBX) and OWC Pharmaceutical Research (OWCP) have rallied 13,594% and 19,251%.
On October 3, 2016, CNBX traded for less than $0.05 while OWCP traded for less than $0.01. CNBX and OWCP are currently trading at $6.45 and $2.09, respectively.
Although these rallies are tremendous, we think the shares are overvalued and do not think these prices are sustainable in the near term.
What do these Companies Do?
Cannabics Pharmaceuticals, a U.S based public company, is dedicated to the development of Personalized Anti-Cancer and Palliative treatments. The company’s leading product is Cannabics SR, a long acting medical cannabis capsule designed for cancer patients as a palliative treatment. The company’s R&D is based in Israel, where it is licensed by the Ministry of Health for its work in both scientific and clinical research. The company’s focus is on harnessing the therapeutic properties of natural cannabinoid formulations and diagnostics. Cannabics engages in developing individually tailored natural therapies for cancer patients, utilizing advanced screening systems and personalized bioinformatics tools.
One World Cannabis, founded in 2014, is an Israeli company focused on the research and development of cannabis-based pharmaceuticals and treatments focused on a wide variety of medical issues. Through its Israeli based fully owned subsidiary, the company is a developer of cannabinoid-based therapies targeting a variety of different medical conditions and disorders. In November, OWCP announced that it was submitting the safety protocol for its psoriasis cream to Israel’s national Institutional Review Board. The study is currently underway and the results are expected by the end of March, 2017.
Urge Caution, Be Selective
We urge caution with investing in companies like this. The charts look very similar to Pineapple Express (PNPL) before it was suspended by FINRA as well as AXIM Biotech (AXIM), which has fallen more than 50% from its recent highs.
Focus on quality companies that are not overvalued and are led by a management team with a proven track record of success.
Important Investor Disclosures
Disclosure. Compensated Affiliate. This report was authored by and is property of StoneBridge Partners LLC. All information and data relied upon in drafting this report is publicly available. The author believes and considers its sources to be reliable, but does not guarantee the accuracy or completeness of any information contained in this report. Any and all information, data, analyses and opinions are provided for informational purposes only and is not intended, in any manner, as investment advice. Any projections or other information generated by StoneBridge Partners LLC regarding the likelihood of various investment outcomes are hypothetical in nature, do not reflect actual investment results, and are not guarantees of future results. None of the material contained in this report is intended as a solution or offer to sell or purchase a specific stock or any other investment. This report is not directed to, or intended for distribution or use by, any person or entity that is a citizen, resident or located in any municipality, state, country or other jurisdiction where the distribution, publication, availability, or use of this report is contrary to any governing law or regulation. The securities discussed in this report may not be eligible for purchase and/or sale in certain jurisdictions or by particular individuals. It is important that you check any and all governing laws and/or regulations that may be applicable in your jurisdiction. Investing in securities of issuers organized outside of the United States, including ADRs, entail certain risks. The securities of non-United States issuers may not be registered with, nor be subject to the reporting requirements of the United States Securities and Exchange Commission. Please contact a Financial Advisor for professional advice regarding any and all securities investments. This report is intended for informational purposes only. StoneBridge Partners LLC’s officers, directors, employees, affiliates, or subsidiaries may have positions in securities covered by StoneBridge Partners LLC. StoneBridge Partners LLC receives compensation from the company and/or has a position in the securities mentioned in this report