This post first appeared on Micro Cap Daily
CV Sciences, Inc. (OTCQB: CVSI) stock price has been seeing a decline for over a month now, and while the price drop was constant, it was also quite mild. The price reached its highest point in 2019 at $6.8 in late March of this year, only to see a decline as it approached the resistance level at $7. The decline eventually led it to $4.75, which is CVSI’s current price. However, a new surge might arrive soon, as that has been the prices typical behavior whenever it reached these levels in the past.
The $4 level has been the price’s largest support level ever since August of last year when the price started seeing its largest surge in the last 12 months. While the surge started and ended in a matter of only a few weeks, the price never returned to its former lows, below $3. Instead, it was typically fluctuating between the support at $4 and resistance at $6. As volatile as prices can be, this is considered a relatively stable situation, especially on a long-term scale. However, the price rarely saw periods of full stability, and when it did — they were rather short. Instead, it has been bouncing from $4 to $6, and back again. Right now, we see it nearing its bottom yet again, with another growth expected to follow.
Who is CV Sciences?
CV Sciences is a cannabis-based company that focuses on consumer products and pharmaceuticals. The firm’s largest focus has been on the development and commercialization of proprietary prescription drugs that are based on synthetic cannabidiol, also known as CBD.
The company uses CBD as the active pharmaceutical ingredient, and it has developed strict procedures for every aspect of production, including the development, manufacturing, marketing, and sale of the CBD-based products.
The company’s initial drug candidate was actually a chewing gum that uses a carefully measured combination of CBD and nicotine. The gum’s purpose is to help treat smokeless tobacco addiction, and the company has seen major success in this regard. Furthermore, the firm’s executives believe that the smokeless tobacco use and addiction market is currently estimated at $2 billion. However, in years to come, that market is expected to double in size.
Apart from the chewing gum, the company is also known for its new major hit product — PlusCBD Oil, which has been recognized by many in the industry as a top-quality product.
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CV Sciences in 2018 and 2019
As mentioned, CV Sciences’ stock price reached its peak in August 2018, but this growth actually started earlier, in July, after the firm announced that it would expand the retail store count of its industry-dominating brand, PlusCBD Oil. The company’s success brought a decent amount of profit back then — enough for the CV Sciences to repay all of its remaining debt.
However, just as the firm reached its peak, Citron Research, a company well-known for seeking out successful firms and trying to damage their reputation through reports that are often false and misleading, accused them of violating securities laws. Following Citron’s report, CV Sciences found itself investigated, with multiple class action lawsuits filed against them.
This has been one of the major reasons why the firm’s stock price started its massive decline, which took the price all the way down to $3. The lawsuits started arriving one after the other, and the firm responded to them, and it also issued reassuring reports for its shareholders. The price quickly started its recovery, but it got locked between the support at $4 and resistance at $6 ever since, occasionally breaching both barriers, but only for a short period.
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The situation finally started to turn for the better for the company in 2019, and it had made multiple successful moves, one of which was the expansion into food, drug, and mass channels, as announced in mid-April. While the effects of Citron’s report and multiple lawsuits that followed are still being felt, the firm appears to be on the right path, and its’ stock price will undoubtedly grow in time. With that in mind, this might be the best time to invest in the company, while its’ stock price is still quite undervalued. We will be updating on CV Sciences when more details emerge so make sure you are subscribed to Microcapdaily so you know what’s going on with CV Sciences.
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Disclosure: we hold no position in CV Sciences either long or short and we have not been compensated for this article.
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This post first appeared on Micro Cap Daily