Cannabis Science, Inc. (OTCBB: CBIS) $5M (MarketCap) Acquires Revenues and Wages Battle

Cannabis Science is a developmental stage company at the forefront of pharmaceutical medical marijuana research and development. The company works with world authorities, and adheres to scientific methodologies to develop, produce, and commercialize phytocannabinoid-based pharmaceutical products to treat disease and the symptoms of disease, as well as for general health maintenance. Needless to say, the company has been attracting a ton of press recently as medical community professionals and ailing patients continue to consider the legitimacy of regulated, controlled, and taxed medical marijuana in the U.S. and abroad.

The company operates in five separate but major segments that include: Horticulture Division - pharmaceutical grade medical cannabis grown under stringent quality controls; Analytical Labs - state of the art facilities developing cannabis extracts and pharmaceutical grade drugs; Manufacturing - cutting edge facilities for creating oral and topical medications for various ailments; Clinical Trials - initial FDA clinical trials targeting veterans suffering from chronic pain and PTSD; Distribution - in state dispensary operations with a growth focused on national dispensaries in the future. Understanding the businesses Cannabis Science operates in is the key to understanding the company’s potential for incredible success (and challenges) in bringing medical marijuana to mass market within only a few years time.

The company recently acquired 100% of a private company that will provide Cannabis Science with two revenue generating operations that are expected to create positive cash flow going forward. The actual transaction was a share swap of 2.4M shares that will provide both the facilities and rights of these operations and the addition of the target company’s founder, Adam Pasquale to the management team at Cannabis Science as the Director of Horticultural. The Company is also targeting financial strength as a focus for 2010; by the end of June 2010, the company plans to have retired a significant portion of its debt by converting it into common equity. If the company can eliminate its debt smoothly, that move coupled with an increase in revenues could attract more institutional investors, adding amplifying the valuation of the company.

Cannabis Science has long been identifying the urgent need for effective therapeutic and medicinal care for returning veterans who suffer from Post Traumatic Stress Disorder or PTSD for quite some time. Sadly, more and more reports of suicides among veterans who have been treated with Seroquel and other antipsychotics that are produced by AstraZeneca, bought by the Pentagon, and prescribed to patients with PTSD are continuing to make headlines. Dr. Robert Melamede, PhD., Cannabis Science President and CEO, offered his position, "Of course, after more than 5,000 years of use, cannabis has not been shown to have caused a single death, and it is now widely - but illegally - used by veterans and others with PTSD as we have reported. It is shameful that those who deserve the best treatment available are being denied access to cannabis while they are given a cocktail of powerful drugs that seems to be killing them." Seroquel recorded revenues of nearly $5B last year, highlighting the immense potential for Cannabis Science to deliver treatment and steal market share.

The uphill battle lies ahead, as there are vast amount of government proponents and resources that are standing in the way of the company as it intends to move its products forward. Foremost, while medical marijuana is legal in a select number of states that include Colorado and California, federal law still prohibits the possession and use of the drug. That being said, the company has friends and foes on both sides. Media outlets like USA Today have reported that there is a growing consensus among government officials and the population that marijuana could one day be regulated as loosely as alcohol or tobacco. The Obama Administration has announced a willingness and intention to examine the War on Drugs for possible reorganization. In November of 2010, California voters will go to the polls to ultimately decide whether or not marijuana will be legalized.

Among those standing in the way of the company’s progress and growth is the National Institute on Drug Abuse (NIDA) and the agencies policies on funding scientific research to determine any illegal drug’s potential benefits. The NIDA presently oversees 85% of the research conducted on controlled substances, and therein lays the deadly Catch-22: the federal laws banning medical and non-medical marijuana cannot be amended until research can prove it has benefits, while no government agencies will allow or fund that research to be conducted.

Cannabis Science has been rallying law enforcement agencies, community activist groups, patient, and the medical community behind its products and mission to bring medicinal marijuana to the mass market. We’ll be watching for new developments from this industry as it gains steam.