BullMarketRun.com

7:30 pm Pacific

Cannabix Technologies Inc. (BLO, CSE) has made a significant move higher since our piece a week ago yesterday (September 10) in Morning Musings, but we encourage you to think very big about this one as it’s a company – and a story – with massive potential appeal in the United States in particular.  To this point they’ve only barely scratched the surface of the American market, the benefits of which are just now beginning to be felt.   Much, much more to come, we believe.

Today’s close of 17 cents gives the company a very modest market cap of only about $7 million.  While there are of course risks, the potential upside with Cannabix is truly immense.  This is a technology and a story that the average person on the street (and the media) can understand, appreciate and support.

After a low-volume retreat over a couple of months to a low of 9 cents September 9, Cannabix began to wake up after news that day including the fact the company signed a “collaboration” agreement with Field Forensics Inc. to develop a roadside test kit for use with the Cannabix marijuana breathalyzer technology which is rapidly proceeding to the prototype stage.  Field Forensics is a highly reputable company growing its networks through homeland security, the military and police departments.  We expect the relationship between Field Forensics and Cannabix to be very mutually beneficial.

Excitement over the company’s patent-pending marijuana breathalyzer technology (BLO is a first-mover in this space, no one else has what they’re developing) drove the share price as high as 32 cents within 7 days of BLO trading on the CSE in late June.  Over the summer, company officials were focused primarily on BLO’s business model and behind-the-scenes efforts to introduce this technology and the BLO story to the critical U.S. market.  We believe they’re on track, and evidence of that is growing by the day.  Trading volumes are also beginning to pick up on the OTC where BLO trades under the symbol “BLOZF” (the stock became “piggyback” eligible for trading in the U.S. Sept. 6 with important DTC eligibility in the works).

Below is a chart of how BLO has traded since late June.  You can see how the retreat from the 20-cent level was on low volume (good sign) and how the the recent breakout occurred on very robust volume.   The 10 and 20-day moving averages (not on this chart) have reversed to the upside, and these rising SMA’s should provide strong support going forward.

As always, perform your own due diligence.  Management, of course, is crucial, and Cannabix in our view has a smart team that’s careful, prudent, and market savvy.  BLO of course is still a very speculative opportunity but quality management always helps reduce the risk.  This is a company keenly focused on building a business with a niche product that clearly has outstanding potential to fill an important need for law enforcement and many workplace environments.

Note:  Both John and Jon hold share positions in BLO.