Cannabiox Technologies Inc (OTCMKTS: BLOZF)
Cannabix Technologies continued to roll higher on Wednesday, with shares trading up to an intraday high of 81¢ a share before pulling back to close at 71¢ per share – a gain of 20.25% on the day. Volume was extremely strong at 2.8 million shares traded, up from its daily average of 356K shares per day.
Why BLOZF Rolled Higher
While no actual company-sponsored news lit the wires, investors are still attracted to the notion that BLOZF will deliver a first-to-market device to measure marijuana-induced intoxication for both roadside and professional applications.
A blog piece posted in the morning discussed BLOZF and the likelihood of its prototype breathalyzer becoming a reality in the near future. I agree with the synopsis.
I covered BLOZF for CNA Finance last month and remain convinced that the stock is destined to light things up for shareholders going forward. However, investors need to remain focused and understand a couple of things. The BLOZF has only produced a prototype model and the field testing required to prove the device accurate is still several months away, at the very least.
To keep the device in hot demand, it doesn’t hurt that marijuana laws continued to relax on November 8th, with additional statutes being passed to allow recreational use and to further liberalize the use of marijuana for medicinal purposes. Colorado passed additional laws allowing for the use of marijuana in establishments that serve alcohol, perhaps setting the path for additional states to follow suit in the next round of elections. Now, at least in Colorado, a patron can have a smoke, a toke, and a sip of Jack and coke. It’s the pause that refreshes.
Cannabix Technologies, A User’s Friend Or Foe?
For marijuana users, the Cannabix breathalyzer device can either be considered friend or foe. Obviously, the intent of the device is to play a significant role in keeping intoxicated drivers off of the roads. The device will also be a useful tool for employers and institutions to monitor those suspected of using the drug or to screen people prior to or during employment.
Friend or foe, the device is an acceptable compromise to any marijuana user, and the benefits of having the freedom to use the drug far outweigh the inconvenience of being tested for intoxication. Other than strict constitutionalists, who will never be amenable to search and seizure in any capacity, the device can be a useful and life-saving tool for law enforcement and employers.
The device has been in development for the past two years, and the Beta 2.0 prototype was introduced to the market a little over two months ago, highlighting its lightweight design and compact size. The device measures direct levels of THC, the psychoactive component of marijuana that causes the intoxication of the user. The reading is gauged by the levels of THC within the user’s blood.
If you are using, the device will detect recent use of the drug, not offering indication of use from days or weeks prior. This strength in the Beta 2.0 may expose the weakness in design that potential competitors may face in trying to produce a competitive device. The BLOZF device will replace the standard method of data collection, typically through blood or urine analysis, and will provide immediate results in the field compared to the weeks required for a lab test to be analyzed and returned.
BLOZF Closest To Getting Ripped
Of those that have shown an interest in getting a product to market, BLOZF is closest to actually delivering a working device. If they do, the stock should rip higher. The Beta 2.0 replaces the original BLOZF prototype, is 10X smaller than the original, and has a rechargeable battery and a touch screen function. The science is based on quadrupole mass spectrometry, which can detect lesser amounts of THC than the original prototype.
BLOZF not only has the infrastructure in place to deliver a working device, but they have also put in motion the regulatory steps required to have the device approved for use in Canada and the USA. Results of the pending field tests will be submitted to the Minister of Justice in Canada and the National Highway and Safety Authority in the USA for analysis, with the intent of receiving court recognized approval of the device and its measurements as being admissible for evidentiary purposes. BLOZF expects to have the data submitted within six months.
As is typical with BLOZF stock, the rollercoaster ride continues, with both huge gains as well as losses being erased on a regular basis. The volume on Wednesday was impressive, though, and the stock held its ground well by closing the day considerably higher. Investors should take caution, though, as the stock has traded in a similar pattern for the past year. BLOZF trades sharply higher, retreats significantly, consolidates, and then it’s a coin toss of higher or lower.
If history repeats, BLOZF might have a strong day of follow through on Thursday, but may very well give back a good part of the gains by early next week. I did see some selling into strength on Tuesday, but with only 78 million shares outstanding, BLOZF is not one of those 300 million share BB stocks that can be quickly pounded by insider selling, especially into strength. I see this on a regular basis with other stocks in the MJ sector, so I encourage investors to be careful of investing based on headline hype.
Light It up With Cannabix
Consistent with my prior editorial on BLOZF, I expect the stock to be a long-term winner. However, the ride will likely be filled with erratic moves both high and low.
With the seeds already planted by BLOZF, and with the buds starting to bloom, BLOZF certainly has the potential to work its way higher. Keep apprised of the data, though, as any setback in the field trials or regulatory filings would be an immediate buzz kill and potentially wipe out a significant portion of the company’s market cap.
But, if that happens, perhaps a quick visit to Colorado would help ease the pain. If you go, ask for Carl, he’s the best greens keeper in the state and can surely set you up with a California/Colorado hybrid.
[Image Courtesy of Wikimedia]