I’ve been hard on Cannabix over the past year, as it seeks to build the world’s first effective cannabis breath testing unit. That tradition will likely continue for a while yet.
The company announced today that it has a beta version of its tech operating now, which is 4x smaller than the previous version and takes 10x less power to operate. These are good things.
The downside? The unit is still upsized.
The Cannabix unit is described as a ‘standalone desktop device’ with ‘proprietary configurable high voltage power supply which operates on conventional power sources.’
In other words, it’s big and needs to be plugged into a wall.
The last unit, the demonstration that the tech works, was a standalone floor unit. Big. Hefty. Massive. So this is an improvement, sure, but how much of an improvement?
What the company hopes to create is something that will run on battery supply and be handheld. They say that’s doable. I can’t see it.
However, I could definitely see a future in selling a desktop unit that could be put in police stations and/or places of employment where heavy machinery exists, to be used on people suspected of being high as F.
Let’s say Moonbeam the Fire Spinner’s VW van is veering all over a Salt Spring Island backroad. Cops pull him over. Van stinks of happy nugs. Simply take Moonbeam back to the cop shop and have him blow in the GIGANTIC Cannabix unit, which promptly says, yes, Moonbeam is shitballs wasted.
That. Will. Do.
The endless race to create a handheld unit can continue, sure, but Cannabix needs to show that it will DEFINITELY have a product to market inside the three years it gave itself to do so (we’re halfway through that now), and a base unit that doesn’t need to be miniaturized to a level that would make Steve Jobs happy would make the market pee rainbows.
As things stand, Cannabix is overvalued, for mine. It’s long been a heavy pump target, which has at times seen it shoot above $0.50 a share, and at others get down to the $0.15 level, which makes savvy investors wary about jumping in. It was at $0.35 in mid-April, $0.19 last week and today is up 10% on the news with strong volume. It’s easier to catch chickens than catch this stock just at the right time for upward movement.
One thing I will say for this team – they know how to get mainstream news. That’s something they’ve nailed consistently for months now, with stories on Global, CBC, in Metro and 24 Hrs.
One big issue that will need to be addressed, however – according to info released in November of last year, the company says it’s tech is 80% accurate.
Which makes it unusable in law enforcement. And even if it is found to work, law enforcement is still trying to work out exactly how you measure one’s stoned-ness.
There are three other potential competitors in the space, including the leaders in the alcohol breath testing space, Lifeloc (OTC:LCTC), venture capital funded Hound Labs, and a project out of Washington State University.
I think Cannabix may eventually work itself into a useful product, and there may be some who think that a Lifeloc acquisition of the company may not be more than a few news releases off.
But people who thought that a year ago are pretty much sitting on a 0% return right now, and back then there wasn’t a handful of groups fighting for first mover advantage.
At a $16.5m market cap, I think this stock is overvalued by about 70%, but that’s not to say everyone thinks like I do. On previous form, there’s no reason to think BLO.C won’t jump and/or drop by 40% on any given Tuesday as investors try to read the thoughts of other investors and front run pack sentiment.
Play only if you’re confident you can manage those upsy-downy days. I can’t.
–Chris Parry
http://www.twitter.com/chrisparry